Reuse and remanufacturing key to resource security

Credit: Circular Economy Task Force

Expanding reuse, promoting remanufacturing and encouraging resource recovery are ‘key’ to ensuring the UK’s resource security, the Circular Economy Task Force (CETF) has found in its ‘Resource resilient UK’ report. 

According to the group, secondary supplies have ‘much lower’ exposure to environmental risks, but these resources are currently lost because products aren’t designed for recovery and business sectors aren’t incentivised to share common approaches. 

Set up via the UK’s Resource Security Action Plan – sponsored by Defra and BIS – and composed of businesses and organisations including Boots, WRAP and waste management company Viridor, CETF is convened by environmental think tank Green Alliance and looks into preventing the impacts of resource insecurity.
 
The task force has today (16 July) released its first report on the UK’s future resource security. ‘Resource resilient UK’ has found that UK businesses can’t tackle resource risks effectively until the ‘government’s industrial strategy takes them seriously’. It urges the government to quantify resource security risks for different business sectors and implement measures to protect resources ‘now’, or risk falling behind competing countries and forcing up prices. 

CETF says: ‘A clearer industrial strategy would de-risk collaboration, set agreed sector-wide goals for recovery and stimulate businesses to adopt new, resource efficient business models. Manufacturers could recover components rather than just raw materials… These new supplies would also be less exposed to energy, water, and other material security risks.’ 

Report findings 

Looking at different resources frequently used by manufacture processes, ‘Resource resilient UK’ identifies ‘major environmental risks’ that are creating ‘significant commercial uncertainty for manufacturers and businesses in the UK’, such as increasing competition for resources and price volatility.

According to the report there are several key materials that industry uses that either need to be protected or rationed. These include: 

• Copper: Heavily relied upon by the electronics industry, copper has come under increasing threat due to: ‘acute water scarcity’ in copper mines in Chile; increasing extraction costs as ore grades go down (falling from around eight per cent to just 0.7 per cent over the past 150 years); and price volatility. 
• Aluminium: Used by the car manufacture and drinks can industries, aluminium is cited to be one of the most easily reusable and recyclable materials. However, CETF argues that ‘uncertainty over future carbon prices undermines the business case for better reuse and recovery’. 
• Oil: The most common form of energy for many manufacturing processes, oil is seeing its price rise as reserves become harder to reach and more costly to extract. CETF argues that by remanufacturing and recycling resources, business would need to use ‘much less energy’, helping to offset rising prices. 

The report finds that resources are currently lost because products aren’t designed for recovery and business sectors aren’t incentivised to share common reuse or recovery approaches.

Recommendations 

Key interventions outlined by CETF include: 

For government:

• launching a government-led study into the UK’s exposure to material insecurity;
• using the industrial strategy to ‘broker collaboration within business sectors’;
• ‘clarifying’ competition law to reinforce exemptions for environmentally-beneficial coordination between businesses;
• intervening in product design directly through existing legislation to make products easier to reuse, remanufacture and recycle. 

For business:

• disclosing ‘high impact risks’ on water, land, and materials use in company reports to investors; and
• showing greater commitment to use long-term contracts and joint ventures to ‘speed up recovery of materials and products’. 

The report concludes: ‘UK businesses have been at the forefront of circular economy thinking, but progress on the ground has yet to catch up with the rhetoric. The actions proposed by Task Force are intended to give companies the confidence to pursue circular approaches, and to help to create the tipping points that enable a resource resilient UK.’ 

Speaking of the report, author Dustin Benton, said: “Our analysis shows that companies in the UK want and need to avoid resource security risks. There’s a lot that businesses can do on their own, but the government needs to help. The government’s industrial strategy should quantify resource security risks for different business sectors. It also needs to actively broker co-operation across supply chains to get materials back, and push businesses to redesign their products to make them easier to recover.”

Reactions to the report 

The report has been welcomed by members of the manufacturing, energy and business industry, with Gareth Stace, Head of Climate and Environment Policy at manufacturers’ organisation EEF, saying: “The Circular Economy Task Force’s recommendations are a useful contribution to the current debate on how to stimulate a circular economy. We now need a clear delivery plan on how we move this forward. This has to be kick-started with a full debate with manufacturers, designers, local authorities and the waste management industry to establish the feasibility of these suggestions and identify any unforeseen impacts. We must then quickly focus on more rigorous analysis of policy options which can incentivise action, encourage collaboration and enhance competitiveness of our manufacturers and contribute to a more balanced and sustainable growth profile.”

Dan Cooke, Director of External Affairs for Viridor, said: “[T]oo often the various components of our economy have taken a fragmented approach to resource efficiency.  

“Defining those barriers with clear, considered, cross-sector recommendations from some of the UK’s leading corporates is a welcome outcome from today’s Green Alliance report. Building a resource resilient UK and realising the prizes of sustainable business, resource security, employment and investment will require a real step-change in collaboration by government, industry and the public sector. It will require fresh thinking on encouraging infrastructure investment against a challenging economic outlook.  

“Our sector [waste management] has a critical role to play in delivering greater resource efficiency.” 

This was backed by Matthew Farrow, Director of Policy at the Environmental Services Association (ESA), who said: "This is an important and thoughtful report which identifies many of the key barriers to creating a more circular economy and has some interesting policy proposals for addressing them. Many of the key themes, such as designing for recovery and the need to boost UK demand for recyclate are similar to those in our own recent report on this topic, ‘Going for Growth – A Practical Route to a Circular Economy’.  The support for a robust MRF Code of Practice is also welcome.

"As an industry at the heart of investing in and building a circular economy we look forward to playing our role in taking this agenda forward."

Resource security concerns have increased significantly over the past five years, reflecting risks affecting the availability and the price of materials essential to industry. Indeed, starting from this month, Bradford University has become the first institution to offer a circular economy Master’s in Business Administration (MBA) degree.

Read more the Circular Economy Task Force's report 'Resource resilient UK'.