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Barriers to advancing remanufacturing, refurbishment, repair, & direct reuse:

Insights from the International Resource Panel

Assessment of Resource Efficiency and Innovation in Circular Economy through Remanufacturing, Reuse, Repair, and Refurbishment

Prof. Nabil Nasr*, C. Kreiss, J. Russell*International Resource Panel (IRP) Member

Associate Provost and Director, Golisano Institute for SustainabilityCEO, the REMADE Institute

Rochester Institute of Technology (RIT) – Rochester, NY USA

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ASystem-WideViewtoUnderstandBarrierstoLEPs

Export

RecyclingMarket

SecondaryMarket

RecyclingMarket

DisposaltoEnvironment

DisposaltoEnvironment

RecyclingMarket

DisposaltoEnvironment Virgin

Materials

RecycledMaterials

VirginMaterials

DomesticCores/Reuse

ImportedCores/Reuse

Imports(DevelopedEconomies)

ProductsIn-Use

Maintenance&Repair

Collection&Diversion(New,DirectReuse,Refurbished,Remanufactured)

NewDemand(New,DirectReuse,Refurbished,

Remanufactured)

DomesticProduction(New,DirectReuse,Refurbished,

Remanufactured)

RecycledMaterials

Imports(DevelopingEconomies)

DemandedProductCollectedEOUProductNewInputsReuseInputs/OutputsRecyclingInputs/OutputsGarbageConnectedRecyclingFlowsConnectedReuseFlows

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BarrierstoLEPsConstrainSystemsinDifferentWays

Export

RecyclingMarket

SecondaryMarket

RecyclingMarket

DisposaltoEnvironment

DisposaltoEnvironment

RecyclingMarket

DisposaltoEnvironment Virgin

Materials

RecycledMaterials

VirginMaterials

DomesticCores/Reuse

ImportedCores/Reuse

Imports(DevelopedEconomies)

ProductsIn-Use

Maintenance&Repair

Collection&Diversion(New,DirectReuse,Refurbished,Remanufactured)

NewDemand(New,DirectReuse,Refurbished,

Remanufactured)

DomesticProduction(New,DirectReuse,Refurbished,

Remanufactured)

RecycledMaterials

Imports(DevelopingEconomies)

DemandedProductCollectedEOUProductNewInputsReuseInputs/OutputsRecyclingInputs/OutputsGarbageConnectedRecyclingFlowsConnectedReuseFlows

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OVERVIEWOFBARRIERSTOLEPSInsightsfrom2016IRPWorkshopsinBerlin&Beijing;2016USAAMTECSurvey

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DifferentTypesofBarrierstoLEPs

Regulatory&AccessBarriers:

• Are typicallyimposed throughgovernmentregulationsand/orpolicy;• Affectproductionpermitsand/oraccesstocapital;• Affectimport/exportrestrictions;• Affectadditionalimport/exportrequirements(e.g.fees,taxes,inspections);• Relatetodefinitionsfor‘previouslyusedproducts’,‘wastes’,and/orspecificLEPs.

TechnicalBarriers:

• Are typicallyaconditionofthestateof theeconomy;• Affectsaccesstotechnologyandequipment;• Affectsaccesstoskilledlabor;• Affectsaccesstokeyinputs,including‘cores’;• Affectsaccesstoproductinformation(e.g.specifications;corelocation).

MarketBarriers:

• Aretypicallyareflection ofpredominantcultureofaneconomy;• AffectcustomerawarenessofLEPs;• AffectcustomerattitudestowardsLEPs,relativetonewproductoptions;• Affectprevalence(supply)ofLEPsinamarketplace.

RecoveryBarriers:

• Aretypicallyareflectionofinfrastructure andpredominantEOUbehaviorinaneconomy;• Affectthesocialnormsassociatedwithdiversionvs.disposal;• Affecttheefficiency,cost,andconvenienceofdiversionprograms;• Affecttheallocationofcostassociatedwithreverse-logisticsforLEPs;• Affecttheoveralldiversionrate,anddomesticsupplyof‘cores’forLEPinputs.

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SummaryofSystemBarriers AssessedMarketCharacteristicsAffectImpacts

• Developedvs.Developing• GrowthRateforProductMarket

StateofEconomy

• Attitudestowards‘new’vs.‘used’products• PreviousexperiencewithLEPproducts

• Accessto,andawarenessofLEPoptionsinmarket

MarketFactors/Barriers• Product/material-leveltransactionrestrictions

• Abilitytoimport/exportLEPs• AbilitytosupplyLEPproductsintomarket

• PermissiontoproduceLEPproductsdomestically

Regulatory&AccessFactors/Barriers

• Accesstoskilledlaborandequipment;• Costofreverse-logisticsandrecovery;

• Accesstorequiredmaterialinputs&cores• Productionefficiency&wastegeneration

• Accesstodistributionchannels

TechnicalFactors/Barriers

• End-of-usebehaviors• Qualityandefficiencyofinfrastructure

• DiversiontoRecyclingrate• DiversiontoSecondaryMarketrate

• DisposaltoEnvironmentrate

RecoveryFactors/Barriers

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PRELIMINARYRESULTS:BARRIERSTOLEPSINUSA,GERMANY&CHINA

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Regulatory&AccessBarriers(Insightsfrom2016IRPWorkshopsinBerlin&Beijing;2016USAAMTECIndustrySurvey)

Regulatory&AccessBarriers

Trade

Lackoflegallyandinternationally-agreedand/oraccepteddefinitionsforLEPs

Legalclassificationof‘used’goodsas‘wastes’

Bansorrestrictionsonimportsof‘cores’

BansorrestrictionsonimportsoffinishedLEPgoods

DomesticSupply

Requirementsforspecialclassificationand/ortreatmentoffinishedLEPgoods(e.g.extensivedocumentation&packaging)

Micro-levelbehavioroffirmsandcustomersrelatedtotaxationandproductionrestrictions

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TechnicalBarriers(Insightsfrom2016IRPWorkshopsinBerlin&Beijing;2016USAAMTECIndustrySurvey)

TechnicalBarriers

Informational

Lackofaccesstoproductspecifications

Lackofthird-partyaccesstocorelocationinformation

Lackofindustrystandardizationanddefinedstandards(leadstounleveledplayingfield)

Operational

Designthatinhibitsremanufacturabilityoftheproduct

R&Dandcorequalitytestingcapabilities

Organizationsystemsorientedtowardslinearproductionactivities

Non-traditionallaborforceskillrequirements

Capital

Capitalrequirementtoextend/addLEPproductioncapacitytoexistingtraditionalmfg.operations

Costandoverheadofcorerecoveryinfrastructureandreverselogistics

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MarketBarriers(Insightsfrom2016IRPWorkshopsinBerlin&Beijing;2016USAAMTECIndustrySurvey)

MarketBarriers

Customer/Consumer

LackofcustomerawarenessandunderstandingofLEPproductoptions

Lackof‘demand’or‘pull’forLEPproductsintothemarketplace

Customerperceptionofvaluerelatedtotheconceptof‘reuse’andLEPproducts

Pre-existingculturalpreferencesfor‘new’products(e.g.statussymbol)

Complexcustomerpreferencesforproductattributesrelatedtosustainability:Sometimesattractant;sometimesdeterrent

Marketplace

Increasingpresenceofnew,low-qualityimportedproductoptions

Complexmarketsignalsandindicators

InconsistentmarketstrategiesofLEPproducersthatconfusecustomersandcreatemisunderstanding

OEMconcernforpotentialcannibalizationofnewproductsalesbyLEPproducts

PresenceofprohibitivepolicythatrestrictsmarketaccesstoLEPproducts

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RecoveryBarriers(Insightsfrom2016IRPWorkshopsinBerlin&Beijing;2016USAAMTECIndustrySurvey)

RecoveryBarriers

Infrastructure

Presenceandqualityofdiversionandrecoveryinfrastructure

Centralizedvs.decentralizedrecoverysystemswhichincreasecomplexityandmagnitudeofreverselogisticssystemcosts

Regulateddiversionprogramsenablesharedrecoverycostburden,versusfirm-initiatedrecoverysystemswithfullcost-burden

Participation

Customerdiversionbehaviorsandcultural/socialnorms

Convenienceofdisposalvs.diversionoptions

Presence(absence)ofcorereturnincentives

International

Abilitytotransportrecoveredcoresacrossinternationalbordersasproductioninputs

Intra-firmvs.Inter-firmcoreexchangesandtrade

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DifferentiationBetweenBarriersinDeveloped&DevelopingEconomies

DevelopedEconomies Developing Economies

Regulatory&AccessBarriers

• Generallydo notrestrictproductionofLEPproducts;

• GenerallydonotrestrictimportoffinishedLEPproducts;

• Constraintsmayexistrelatedtospecificmaterials(e.g.RoHS Directive).

• Generallymoreimport restrictions,conditions,orconstraintsonfinishedLEPgoods;

• Generallyclassify‘used’productorcomponentas‘waste’withintenttoprotectconsumers;

• Whereallowed,importofLEPsoftenrequiresextensiveprocessingandapprovals.

TechnicalBarriers • Generallygreateraccesstorequiredskilledlabor;• Generallygreateruseoftechnology and

equipment;• Generallymoreadvancedtechnologyand

equipment;• Generallymore efficientutilitiesinfrastructure.

• Generallylesser accesstorequiredskilledlabor;• Generallygreateruseofphysicallabor;• Generallylessadvancedtechnologyand

equipment;• Generallylessefficientutilitiesinfrastructure.

MarketBarriers • Generallymorecustomerfamiliaritywith,andopennessto LEPproducts.

• Generallylesscustomerfamiliaritywith LEPs;• Generallygreaterpreferencefor‘new’.

RecoveryBarriers • Generallymoreformaland/oradvancedrecoveryinfrastructureandnetworks;

• Generallyhigherdiversion andrecoveryrates.

• Generallylessformalandlessadvancedrecovery infrastructureandnetworks;

• Generallylowerdiversionandrecoveryrates.

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BARRIERALLEVIATIONSCENARIOSNextSteps

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BarrierConditionsDifferAcrossScenarioEconomies

14(Source:N.NasrandJ.Russell,2016)

EconomyA

Regulatory&AccessBarriers:

OpenEconomy

TechnicalBarriers

MarketBarriers

RecoveryBarriers

EconomyB

Regulatory&AccessBarriers

TechnicalBarriers

MarketBarriers

RecoveryBarriers

EconomyC

Regulatory&AccessBarriers

TechnicalBarriers

MarketBarriers

RecoveryBarriers

EconomyD

Regulatory&AccessBarriers:

RestrictedEconomy

TechnicalBarriers

MarketBarriers

RecoveryBarriers

IncreasingBarrierstoReuseProducts

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ScenariostoUnderstandPotentialBenefitsofLEPs

15

EconomyA EconomyB EconomyC EconomyDStatus QuoScenario

• Developedeconomy;

• No regulatoryoraccessbarriers;

• Minimaltechnicalbarriers;

• Minimalmarketbarriers;

• Minimalrecoverybarriers.

• Developedeconomy;

• Minimal regulatorybarriers;

• Minimaltechnicalbarriers;

• Minimalmarketbarriers;

• Norecoverybarriers.

• Developingeconomy;

• Substantialregulatoryandaccessbarriers;

• Minimaltechnical barriers;

• Substantialmarketbarriers;

• Substantialrecoverybarriers.

• Developingeconomy;

• Restrictive regulatoryandaccessbarriers;

• Substantialtechnicalbarriers;

• Restrictivemarketbarriers;

• Restrictiverecoverybarriers.

BestPracticeScenario

• SameasStatusQuostate • Regulatorybarriersalleviated. • Regulatorybarriersalleviated;

• Technicalbarriersreduced;

• Market barriersreduced.

• Regulatorybarriersalleviated;

• Technicalbarriersreduced;

• Market barriersreduced.

PracticalHighScenario

• Technicalbarriersalleviated;

• Market barriersreduced;

• Recoverybarriersreduced.

• Regulatorybarriersreduced;

• Technical barriersalleviated;

• Marketbarriersreduced.

• Regulatorybarriersreduced;

• Technical barriersalleviated;

• Marketbarriersreduced.

• Regulatorybarriersreduced;

• Technicalbarriersalleviated;

• Market barriersreduced.

TheoreticalHighScenario

• Technicalbarriersalleviated;

• Marketbarriersalleviated;

• Recoverybarriersalleviated.

• Regulatorybarriersalleviated;

• Technicalbarriersalleviated;

• Market barriersalleviated.

• Regulatorybarriersalleviated;

• Technicalbarriersalleviated;

• Market barriersalleviated.

• Regulatorybarriersalleviated;

• Technicalbarriersalleviated;

• Market barriersalleviated.

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SimulatingtoUnderstandPotentialBenefitsofLEPs

16

StatusQuoScenario

• Currentstateofbarriersforeacheconomy

BestPracticeScenario

• EacheconomyexperiencesthesamebarrierconditionsasUSA

TheoreticalHighScenario

• Alleviationofallbarriersineacheconomy

PracticalHighScenario

• Alleviationofpracticalbarriersineacheconomy

IncreasingbenefitsofLEPswithalleviationofbarrierstoLEPs

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AlleviationofLEPBarriersLeadstoGreaterBenefits(Reducedwaste,emissions,energyuse,andvirginmaterialuse)

FavorableCo

ndition

s

BenefitsofLife-ExtensionProcesses

High

HighLowLow

StatusQuoScenario

BestPracticeScenario

PracticalHigh

Scenario

TheoreticalHigh

Scenario

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PracticalHighPotential

TheoreticalLimit

BestPracticePotential

StatusQuo

UnderstandingResourceEfficiencyPotentialThroughScenarios

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QUESTIONS?

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ThankYou

Prof.NabilNasrAssociateProvostDirector,GolisanoInstituteforSustainability(GIS)&CenterforRemanufacturingandResourceRecoveryRochesterInstituteofTechnologyRochester,NYUSA

Email:nasr@rit.eduPhone:+1585-475-5106

http://www.sustainability.rit.edu/