Renault and Land Rover are among those adopting more resource-efficient manufacturing processes in an industry under pressure to cut its environmental footprint. Mike Scott reports
The automotive sector is responsible for around a fifth of all CO2 emissions globally. At current rates of growth, it is on track to being solely responsible for more than 0.8C of global warming by the end of the century. Cars are also responsible for 90% of air pollution in cities and contain an average of 1.4 tonnes of material, according to EIT Climate-KIC.
At the same time, the sector is a heavy consumer of other natural resources, using 80% of all the world’s rubber, a quarter of all aluminium produced and about 15% of the global steel market.
It is a heavy environmental toll for an item that, on average, sits idle of for 96% of the time, points out Andy Hibbert, CEO of Karshare, a company that helps people to rent out their cars when they are not using them.
Bleriot envisages a shared multi-modal mobility system in which different modes of transport can be shared, electrified, autonomous and interconnected
One response to the need to decarbonise road transport has been to focus on accelerating the rollout of electric and hydrogen-powered vehicles. But building more cars will also significantly increase the emissions from manufacture, and it doesn’t solve problems such as resource-depletion.
The need for alternative solutions led to the launch of the Circular Cars Initiative at the World Economic Forum (WEF) in Davos this year. Backed by EIT Climate-KIC, WEF, SystemIQ and the World Business Council for Sustainable Development (WBCSD), the initiative includes material suppliers, fleet operators, re-manufacturers, recyclers, data platforms and regulators, and will create a roadmap for a more circular car industry this year.
Joss Bleriot, institutions, cities and governments lead at the Ellen MacArthur Foundation, said a circular scenario for passenger cars could reduce global CO2 emissions by 70%, or 0.4 billion tonnes CO2 in 2050. He envisages a shared multi-modal mobility system in which different modes of transport are on offer that can be shared, electrified, autonomous and interconnected. “In such a scenario, passenger cars would increasingly be shared as a service, and designed for durability and reuse,” he says.
These changes would mean there would be fewer cars on the road, but each car would be in use for much greater periods of the day, with benefits including less congestion, lower maintenance costs, less land and investment committed to parking and roads, and less air pollution. “In this system, cost per average passenger kilometre could drop by as much as 77% in 2050,” he says.
Mobility-as-a-service models are already affecting the traditional car industry, with the rise of Uber and Lyft and schemes such as Karshare’s and Renault Mobility in France, which allows drivers to hire cars by the hour or by the day through a self-service phone app.
Another example is Wagonex’s pioneering “just in time” approach to car accessibility, which uses a monthly subscription model rather than traditional outright car ownership.
In the early days, repairing a car for as long as possible was standard practice
On the production side, remanufacturing and closed-loop recycling are key areas to consider when it comes to promoting a circular economy, says Will Craig, managing director of car-leasing comparison website LeaseFetcher. He points out that manufacturers could also introduce discount schemes, as they have in the past, to reduce the number of old diesel vehicles on the road.
Remanufacturing is nothing new, says Thomas Deloison, director of mobility at the WBCSD. “In the early days, repairing a car for as long as possible was standard practice, and it’s only in western countries that there is a view that a car goes to the junk yard and that is it.
“Even today, there is a constant flow of vehicles from developed countries to low- and middle-income countries, where they find a new life.”
In Europe, Renault is the modern-day king of remanufacturing. Its Choisy-le-Roi plant has been remanufacturing engines and other parts since 1949. More than a third of a newly produced Renault vehicle by mass is made from recycled materials, including copper, steel, textiles and plastics.
The results are startling from an environmental perspective: the French carmaker says that one remanufactured part uses 80% less energy, 92% fewer chemicals and 88% less water, as well as generating 70% less waste in the production process than a new component. But the benefits aren’t just environmental: each part is 30-50% cheaper as well. In addition, the factory doesn’t send any waste to landfill; everything is either reused, recycled or in some way recovered at treatment centres.
Renault is also a member of France’s Roadmap for the Circular Economy, which aims for all of the country’s plastic to be recycled by 2025, to cut natural resource use by 30% by 2030 and to create 300,000 new jobs, including in completely new fields.
Electrification brings a simplification of design, creating an opportunity to insert circular principles into the manufacturing process
Other manufacturers have also adopted circular practices. In the US, Ford is using coffee bean waste from McDonald’s to make car parts, Caterpillar has been remanufacturing its pistons and cylinders for many years, and Land Rover has introduced an aluminium recycling programme in the UK.
“More than a million cars are crushed every year in the UK and this pioneering project affords us a real opportunity to give some of them a second life,” says Gaëlle Guillaume, lead project manager for the REALITY programme at Jaguar Land Rover. “Aluminium is a valuable material and a key component in our manufacturing process, and as such we’re committed to ensuring our use of it is as responsibly as possible.”
All of these different aspects of the circular economy are being facilitated by a number of emerging technology trends. The Internet of Things (IoT) enables automotive materials and components to be better-tracked across their lifecycle so that they can be more easily recovered and recycled or remanufactured.
New technologies like 3D printing promise reductions in the amount of materials used, as well as the remote printing of spare parts that need replacing. And the emergence of mobility-as-a-service (MaaS) companies has created the potential for full lifecycle ownership of automobiles by manufacturers or lease companies. This gives those companies a greater interest in maintaining the value of their materials when disposing of vehicles.
The shift to electrification facilitates these developments because electric cars are much simpler than their internal combustion predecessors. “Electrification brings a simplification of design, creating an opportunity to insert circular principles into the manufacturing process,” says Brendan Edgerton, director for circular economy at the WBCSD.
But changes like this will not happen without government action, not least because MaaS business models have yet to show they can make a profit. While Europe is leading the way in this area, thanks to the European Union’s Circular Economy Action Plan and a review of its End of Life Vehicle Directive, “there is a global conversation about this now, whereas five years ago, it was primarily a European discussion,” Edgerton adds.
Companies need to embrace their tier one and two suppliers to design more recyclable parts. It’s a complete change in system
China, Japan and South Korea also have national circular economy strategies, while some US states and companies have set up networks for sharing and recycling resources, and India and Brazil use informal recycling systems. However, according to environmental consultancy Aclima, “the sum of all these efforts remains paltry. Projects operate in isolation and have not shifted the behemoths of global industry.”
Each country has to work out how they can capture the most benefit from the circular economy and mitigate their risks, so in Japan the focus is on electronics and plastic waste, while in South America there is more emphasis on building a circular bioeconomy, Edgerton says.
Collaboration is key, not just in setting standards, but also right along the value chain, from design to disposal. “The automotive industry is exceptionally complex in comparison to other industries, due to the number of parties involved within all stages of the product delivery process,” says Craig of LeaseFetcher. “Individual companies can certainly step up and do their part to become more environmentally and socially responsible. However, the impact of these steps will always be limited if a collaborative approach is not undertaken by all parties involved.”
Edgerton agrees. “We need to understand what can be done with materials. Companies need to embrace their tier one and two suppliers to design more recyclable parts. It’s a complete change in system and it needs to be done collaboratively.”
At the same time, most of the cars currently being manufactured will be share-enabled, Karshare’s Hibbert points out, adding that in the UK, some 36 million cars spend most of their time parked up and not being used. “We don’t need to wallpaper the planet with cars, we just need to use the ones we have more effectively.”
The automotive sector is highly developed and one of the most innovative industries in the global economy, but it is reaching its limits as a system, Deloison adds. “Tailpipe emissions and manufacturers’ emissions are coming under more and more scrutiny. The industry has reached the limits of the current model and it is ripe for change.”
Mike Scott is a former Financial Times journalist who is now a freelance writer specialising in business and sustainability. He has written for The Guardian, the Daily Telegraph, The Times, Forbes, Fortune and Bloomberg.
Main picture credit: Land Rover
This article is part of our in-depth Circular Economy briefing. See also:
WEF Circular Cars Initiative Renault Jaguar Land Rover WBCSD Ellen Macarthur Foundation Karshare Uber Lyft Wagonex 3D printing Aluminium recycling EIT Climate-KIC Systemiq