OECD International Trade and Circular Economy Workshop - Presentation by Nabil Nasr
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The document discusses the relationship between trade and value retention processes (VRPs) such as refurbishment, remanufacturing, and direct reuse, highlighting their distinct roles in extending product lifecycle. It identifies various barriers faced by VRPs, including regulatory, technological, and market challenges, that hinder their adoption and effectiveness in the sustainability landscape. Case studies illustrate potential environmental and economic benefits from overcoming these barriers and promoting integrated market access for VRP products.
OECD International Trade and Circular Economy Workshop - Presentation by Nabil Nasr
- 1. How does trade relate to goods for refurbishment and remanufacturing, and second-hand products? Prof. Nabil Nasr, Associate Provost and Director Golisano Institute for Sustainability Rochester Institute of Technology (RIT) – Rochester, NY USA OECD WORKSHOP ON INTERNATIONAL TRADE AND THE CIRCULAR ECONOMY February 26-27, 2020 Ó N. Nasr. All rights reserved
- 2. Value Retention Processes (VRPs) • Direct Reuse: The using again of a product, object or substance for the same purpose for which it was conceived without the necessity of repair or refurbishment. • Repair: Fixing a specified fault in a product and/or replacing defective components, in order to make the product a fully functional product to be used for its originally intended purpose. • Refurbishment: Modification of an object or a product to increase or restore its performance and/or functionality or to meet applicable technical standards or regulatory requirements. • Comprehensive Refurbishment: Refurbishment (see above) that takes place within an industrial or factory setting, with a high standard and level of refurbishment. • Remanufacturing: A standardized industrial process by which cores are returned to same-as-new, or better, condition and performance. The process is in line with specific technical specifications, including engineering, quality, and testing standards. EOU - End of Use EOL – End of Life Core– Old or discarded products Ó N. Nasr. All rights reserved
- 3. Circular processes are not equal *This only exists for certain sectors and products. Expected EOL Manufactured Comprehensive Refurbishment EOL Almost full service life Manufactured Expected EOL Manufactured Expected EOL Manufactured EOU Direct Reuse Expected EOL Manufactured EOU Repair Expected EOL Manufactured Refurbishment EOL EOU OEM New (Manufacturing) Remanufacturing Comprehensive Refurbishment* Direct Reuse Refurbishment Repair Group 1 Processes Group 2 Processes Group 1 / Full Service Life: Industrial setting that enable Full or Almost Full Service Life Group 2 / Partial Service Life: Typically conducted outside of industrial settings (e.g. repair or maintenance) that enables Partial Extension of Service Life Expected EOL Remanufacturing Full service life EOL Full service life Expected EOL Remanufacturing Ó N. Nasr. All rights reserved
- 4. Top-down: Systems-Level Model Perspective Export Recycling Market Secondary Market Recycling Market Disposal to Environment Disposal to Environment Recycling Market Disposal to Environment Virgin Materials Recycled Materials Virgin Materials Domestic Cores/ Reuse Imported Cores/ Reuse Imports In-Use Product Stock Maintenance & Repair Collection & Diversion (New, Direct Reuse, Refurbished, Remanufactured) New Demand (New, Direct Reuse, Refurbished, Remanufactured) Domestic Production (New, Direct Reuse, Refurbished, Remanufactured) Demanded Product Collected EOU Product New Inputs Reuse Inputs/Outputs Recycling Inputs/Outputs Landfill Recycled Materials Connected Recycling Flows Connected Reuse Flows Ó N. Nasr. All rights reserved
- 5. Identified nine case study products from 3 sectors Identified industry collaborators Collected materials-level (BOM) for every product Collected process-level impact data Modeled & simulated input requirements Bottom-up: Product and Sector-Level Analyses Estimated for each product & process: • Material requirement (kg) & waste (kg) • Embodied energy (MJ) • Embodied carbon (kg CO2-eq.) • Process energy (MJ) • Process emissions (kg CO2-eq.) • Cost advantage ($ USD) • Employment opportunity (FTE) Vehicle Parts Heavy-Duty Equipment Parts Industrial Digital Printers Ó N. Nasr. All rights reserved
- 6. 0 500 1,000 1,500 2,000 2,500 OEM New Remanufacturing Comprehensive Refurbishment Direct Reuse Repair Full Service Life Partial Service Life Material Impacts Per Unit New Material (kg) ProductionWaste (kg) 0 50,000 100,000 150,000 200,000 250,000 OEM New Remanufacturing Comprehensive Refurbishment Direct Reuse Repair Full Service Life Partial Service Life Environmental Impacts Per Unit Embodied Energy (MJ) Embodied Emissions (kg CO2-eq.) USA Process Energy (MJ) USA Process Emissions (kg CO2-eq.) Product-Level Results: Digital Industrial Printer, USA Environmental Impacts Per Unit - Industrial Digital Printer, USA - Material Impacts Per Unit - Industrial Digital Printer, USA - * * * Does not enable full new service life Ó N. Nasr. All rights reserved
- 7. Example results: Brazil aggregate case study industrial digital printers Barrier alleviation implications: • Increased material avoided • Significantly increased embodied energy avoided • Significantly increased embodied carbon avoided • Slight decrease in process energy avoided* • Slight decrease in process emissions avoided* Presence of VRP product access barriers in Brazil economy case study • Alleviation of access barriers leads to significant impact avoidance in Standard Open Market & Theoretical High scenarios *Slight increase in process energy and emissions related to disassembly and cleaning processes -5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Status Quo Std. Open Market Theoretical High Impacts Avoided Estimated Aggregate Impacts Avoided via VRPs - Case Study Industrial Digital Printing Press, Brazil, Aggregated 7 years - Material Avoided (MT) Embodied Energy Avoided (GJ) Embodied Carbon Avoided (MT CO2-eq.) Process Energy Avoided (GJ) Process Emissions Avoided (MT CO2-eq.) Ó N. Nasr. All rights reserved
- 8. There is a significant opportunity for extending remanufacturing 0.1 0.4 0.5 1.0 1.1 1.3 2.0 2.6 2.9 3.8 Consumer products IT products Medical devicews Machinery Motor vehicles parts All other Average Aerospace Retreaded tires HDOR equipment Remanufacturing intensity is low % of total sales 1 HDOR = Heavy-Duty and Off-Road Source: Remanufactured Goods: An Overview of the US and Global Industries, Markets, and Trade, US International Trade Commission, 2012 1 However, remanufacturing is a very profitable activity: Renault’s remanufacturing plant is its most profitable one. Ó N. Nasr. All rights reserved
- 9. Economic Production Activity & Barriers (Source: N. Nasr and J. Russell, 2016) U.S.A. Regulatory & Access Barriers Technical Barriers Market Barriers Recovery Barriers Germany Regulatory & Access Barriers Technical Barriers Market Barriers Recovery Barriers Brazil Regulatory & Access Barriers Technical Barriers Market Barriers Recovery Barriers China Regulatory & Access Barriers Technical Barriers Market Barriers Recovery Barriers Increasing Barriers to Reuse Products Ó N. Nasr. All rights reserved
- 10. Types of Barriers Examples Description of Barrier Impact Regulatory & trade barriers • Complicated regulatory definitions and restrictions for VRPs that affect import, export, and domestic production/consumption activities; • Lack of clear understanding and differentiation between VRPs; • Inputs to VRPs (product cores) often reflected as ‘waste’ under regulatory definitions. Affects flows of finished VRP products from producers to customers in domestic and/or international markets. Collection infrastructure barriers • Lack of policy requiring diversion of EOU/EOL products from waste; • Lack of efficient and/or effective diversion and collection infrastructure; • Cost-burden of reverse-logistics if left to individual organizations. Affects flows of EOU products and components from the customer/user back into the secondary markets and/or to the OEM to be used as inputs to VRPs (reverse-logistics) Customer market barriers • Lack of standards/certifications for VRPs and VRP products; • Perceived low-price = low-quality of VRP products; • High customer risk-aversion. Creates adoption and capacity constraints for the domestic VRP customer market. Technological barriers • Increased production complexity with reverse- logistics and supply-chain considerations; • Specialized labor and equipment requirements; • Cost-burden of investment and R&D on individual organizations. Creates adoption and capacity constraints for domestic VRP producers. Barriers to VRPs Ó N. Nasr. All rights reserved
- 11. • Trade policy interventions to support VRPs must target both radical (system-level) and incremental (process-level) innovation; • Integrated market access and environmental policy approaches: • Accurate and standardized classifications of VRP products, this will allow for VRP products to expand; • Open market access to VRP products, recognizing that market access barriers can be the largest barrier; • Unstrict movement of cores and VRP products , This will allow for growth in products and markets; • Environment-focus, the need for accurate and validated information to guide consumers and acquisition of VRP products; • Public procurement, leading by example via government procurement policies to establish new markets for early-stage VRP innovations. Need for unrestricted market access system for VRP products Ó N. Nasr. All rights reserved
- 12. Different VRP strategies for different VRP barriers Ó N. Nasr. All rights reserved
- 13. Thank you Prof. Nabil Nasr Golisano Institute for Sustainability Rochester Institute of Technology Email: [email protected] Phone: +1 585-475-5106 http://www.sustainability.rit.edu/ 14