09.12.2022
We extract around 100 billion tons of resources from our only planet. This can't happen forever which is why a shift in the value-chain is needed.
One could say that circular economy is the buzz word for the European Green Deal. As the goal is to reduce the earth warming there is a need for drastic CO2 reduction but also a reduction in consumption. Since the world population is rather growing than shrinking. As ourworldindata.org states the UN projects a global population of 10.9 billion by the end of the century. That said it is going to be very difficult to lower consumption worldwide while growing significantly. This challenge calls for a new strategy - circular economy.
The European Commission adopted the new circular economy action plan (CEAP) in March 2020. It is one of the main building blocks of the European Green Deal, Europe’s new agenda for sustainable growth. The EU’s transition to a circular economy will reduce pressure on natural resources and will create sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss.
Circular economy means in simple terms that every resource extracted from earth should be used forever so that the consumption circle is closed or at least nearly closed reducing waste to a minimum. This kind of thinking has an immense impact on the whole lifecycle of every product. Already in the transformation from raw materials into semi-finished products the final use case must be in mind to ensure recycling at the end of the products lifetime.
Since the automotive production has a very long supply-chain of often above Tier-10 suppliers circular economy will be a crucial and challenging topic for the whole industry attached. This means a chain of at least 10 companies are responsible for the final recycling possibilities of the produced car by the OEM. The other way round this means that the OEM has to control its suppliers in such a way that used products are 100% recyclable.
Below you can see in which different stages the consultancy accenture is dividing the automotive value chain depending on the progress of its circularity looking more than 15 years in the future - Being at level 1 today.
According various studies the automotive industry needs to reduce its emissions by 50% until 2030 to meet with the Paris Agreement's goal of 1.5 degrees. Contemporaneous the car-based mobility is meant to increase by 70%. This calls for a more concrete plan than electric driving and a higher percentage of public transport to meet the populations needs.
You can clearly see that today we are standing at the very beginning of a circular economy extremely needed for the future which is why more and more OEMs and suppliers are thinking about this topic.
As an example BMW presented its BMW iVision Circular (see main picture) earlier this year. The goal was to create a vision for a sustainable but still luxurious automobile reflecting on a responsible way dealing with the environment and resources. The company has shown that it is possible to build an entire car out of recycled and second-use materials reshaping the complete value-chain.
Stated by the European Commission as main building block for the European Green Deal it seems to be a focus for the automotive industry too.
Why is this relevant for the Generation Z?
Even though we are a much more open generation towards mobility the car will probably remain a transportation vehicle for a long time. Meaning that we will need the materials available for our cars in 20 to 30 years too. We can only urge the industry to take care of the recyclability today and convince every car buy to keep an eye on not only the emissions but also the circularity of the materials used to not harm more our resources and therefore our planet.
What does this mean for the automotive industry?
Concrete this means for the automotive industry that the thinking of "Secondary First" will be essential in the next years affecting every aspect of design, engineering, production and usage. The need for a shift in the value- and supply-chain is there and is present. Now it is time to integrate that logic of circular economy in every decision being made every day. In my opinion acting accordingly as a manufacturer today and in the next years, will ensure the companies a good image and therefore happy customers of the Generation Z in the future buying cars to experience life and discover the world.
Written by: Maxime Schönberg
Image sources: www.press.bmwgroup.com ; www.europarl.europa.eu ; www.accenture.com