Remanufacturing:Links to Sustainability

Matt BogoshianSenior Policy Counsel

Office of Chemical Safety and Pollution PreventionU.S. Environmental Protection Agency

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Background - Global

• Throughout history, crises have created conditions that led to the conservation of, and reevaluation of how we use, natural resources

• World population is expected to rise from 7 billion to 9 billion by 2050. Population growth in emerging nations and urban areas will lead to unsustainable increase in consumption of natural resources; e.g., due to world demand for copper, amount of copper mined over next 25 years may equal amount of mined to date (Nasr, 2012).

• In order to adapt to these conditions, we expect an increased need to conserve, e.g., greater use of remanufacturing practices.

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Background - U.S. Remanufacturing

• In U.S., remanufacturing dates back to Great Depression and World War II. Historically, main drivers were economics, resource shortages, and available manufacturing capacity.

• Based on literature review, approximately 80,000 companies remanufacture products, employing about 500,000 workers; about 25 workers on average per company.

• Now the main drivers are: a) quality, because remanufactured products are at least as good as new products; b) cost, because remanufactured products are less expensive to make and purchase; and c) health, for people and planet because remanufacturing products require less energy and generate less waste.

• Examples of sectors involved in remanufacturing include auto parts, cellular telephones, computers, construction equipment, and medical equipment.

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Sustainability Pillars

• Sustainability has three pillars:– Economy;

– Environment;

– Society.*

• Remanufacturing has a place within each pillar, e.g.,– Lower cost/Increased profit;

– Resource conservation/Less energy and pollution/Better health for people/planet;

– Skilled jobs/People thrive. * Pillars are linked to Profit, Planet, People.

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Main Advantages of Remanufacturing*

• Economy: Costs less to make and buy remanufactured product (costs about 20-60% less) than equivalent manufactured product; Employs skilled work force.

• Environment:– Saves about 85-95% of energy needed to manufacture new product.

– Worldwide, conserves equivalent of 69 million barrels of crude oil annually, reducing CO2 releases by 28 million tons.

– Conserves natural resources -- approximately 14 million tons annually -- and reduces landfill disposal by about 75% compared to manufacturing new product.

– Upgraded products work more efficiently than previous new product.

• Society: Remanufacturing requires skilled work force.

• Performance: Works as well or better than previous product.

• Responsibility: Companies are increasingly being held accountable by stakeholders for environmental impacts from their supply chains and products during their life cycles.

* Estimates based on review of the literature.

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Examples

• Caterpillar has a remanufacturing division because reman is good for customers, business, and environment:– Returned over 2 million “cores” in 2010;

– Remanufactured or recycled 134 million lbs material per year;

– Recycle 200,000 pounds cardboard, 3.4 million pounds wood annually;

– Preserve about 85% of original energy “value add”;

– Approaching “zero landfill” status.

• Xerox - about 95% of its equipment sold through direct channels in U.S. is returned for end-of-life disposition:– Diverted 5.4 metric million tons from landfill disposal in 2009 through

remanufacture and parts reuse.

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Next Steps to Consider

• Raise awareness -- Promote remanufactured products as new products; Motor & Equipment Remanufacturers Association’s (MERA’s) Manufactured Again™ campaign sounds promising.

• Evaluate impacts -- Compare life-cycle impacts of remanufacturing and manufacturing new products for key product lines; Populate LCA data bases.

• Make connections -- Identify links to product take-back and stewardship efforts.

• Align with standard-setting processes and tools -- Assign industry classification code; Improve industry data collection; Incorporate remanufacturing in product design, life cycle, etc.

• Network into new markets -- Increase demand through encouraging government agencies to purchase remanufactured products; Reduce trade barriers.

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Thank you!

• Questions?

• Contact information:

Matt BogoshianSenior Policy Counsel

Office of Chemical Safety and Pollution Prevention

U.S. Environmental Protection Agency

Bogoshian.Matt@epa.gov

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