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New report on EU remanufacturing: untapped economic, employment and environmental potential

A new report from the European Remanufacturing Network (ERN) has presented an outlook for remanufacturing across the EU. The topline figures present a fairly familiar story. Remanufacturing is profitable in many industries, provides skilled employment, and saves resource and energy use – but remains undervauled and underused.

Through interviews and research, the authors of Remanufacturing Market Study have gathered detailed data on the current level of remanufacturing in the EU, across nine key sectors including aerospace, medical equipment, electronics, furniture and rail. The study reveals economic value, employment figures and approximate carbon benefits. The hope is that this will lead to increased understanding and remanufacturing intensity in Europe.

It was found that remanufacturing generates an estimated €30bn annual turnover and employs around 190,000 people across the nine sectors studied. For the businesses involved, “higher profit margins, environmental responsibility, strategic advantage and increasing market share” are the main drivers behind investment in remanufacturing processes and infrastructure.

In order to correctly appraise these statistics however, it’s crucial to note that the current remanufacturing intensity (ratio of remanufacturing to new manufacturing) is estimated at just 1.9%. This suggests significant room for improvement, with greater economic value and job creation potential.

In order to increase this intensity, and catch up with more established remanufacturing activity in the USA and China, the ERN report highlights a number of barriers that need to be to overcome.

At the top level, the development of an EU-wide “common vision and strategy” to encourage remanufacturing could enable greater collaboration and knowledge-sharing across sectors.

More specific barriers explored in the report include customer recognition of remanufacturing, the availability and transportation of ‘core’ components for remanufacturing, the quality of the used cores, and high labour costs. Other levers to support this shift are the development of innovative, profitable business models that facilitate product/component recovery, product design that enables remanufacturing, and remanufacturing technologies that improve processes and results.

Many of these barriers are explored at EU-level in Delivering the Circular Economy: A Toolkit for Policymakers, released in 2015. The practical guide offers potential routes to shift to a circular economy development path, for example through the application fiscal frameworks to stimulate activities such as remanufacturing.

As a result of this latest research, the ERN expects “that by 2030 EU remanufacturing could attain an annual value of €70bn and €90bn respectively with the associated increase in employment of 34,000 and 65,000 jobs respectively.”

Source: Remanufacturing Market Study, European Remanufacturing Network

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The Author

Joe Iles

Joe Iles

I'm Editor in Chief of Circulate and Digital Architect at the Ellen MacArthur Foundation.

When I'm not discussing the circular economy, I also love talking about digital media and online trends, memes, music, bad films and good beer.

You can find me on twitter @joeiles or email joe[at]circulatenews.org