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Circular products and business models and environmental impact reductions: Current knowledge and knowledge gaps

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The circular economy is billed as a solution to increase economic growth while reducing environmental impact. It is argued that retaining the value of products, components and materials by fostering the “inner loops”, such as reuse, refurbishment and remanufacturing, increases the resource-efficiency. However, published environmental assessments estimating the actual impact of these so-called circular outcomes are inconclusive. This paper presents the results of a systematic literature review of previous environmental assessments on circular products and circular business models, focusing on the tighter technical loops including reuse, refurbishment, and remanufacturing. Mapping reveals factors that influence the environmental impact of circular products and other aspects that should be incorporated in environmental assessments. Even though 239 papers were identified that discuss the environmental impact of circular products and/or circular business models, the far majority only considers a traditional product in a traditional sales model that is remanufactured and compares the impacts of remanufacturing with manufacturing new products. While it is important to quantify the impacts of remanufacturing, it is remarkable that product design strategies for circular economy (e.g. design for remanufacturing, upgradability, modularity) and product-service systems or other types of circular business models are usually not considered in the LCA studies. A lack of studies of products with so-called circular designs that are utilized within circular business models is apparent. In addition, many assessments are static analyses and limited consideration is given to future increases in the share of renewable energy. One can thus question how well the available environmental assessments quantify actual circular products/offerings and the environmental performance gains they could provide in a circular economy. The results show that there is an urgent need for more LCAs done in a way that better captures the potential benefits and deficiencies of circular products. Only then will it be possible to make robust claims about the environmental sustainability of circular products and circular business models and finally circular economy in total.
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Circular products and business models and environmental impact reductions: current
knowledge and knowledge gaps
Patricia van Loon, Derek Diener, Steve Harris
PII: S0959-6526(20)35673-0
DOI: https://doi.org/10.1016/j.jclepro.2020.125627
Reference: JCLP 125627
To appear in: Journal of Cleaner Production
Received Date: 20 January 2020
Revised Date: 17 November 2020
Accepted Date: 21 December 2020
Please cite this article as: van Loon P, Diener D, Harris S, Circular products and business models
and environmental impact reductions: current knowledge and knowledge gaps, Journal of Cleaner
Production, https://doi.org/10.1016/j.jclepro.2020.125627.
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Credit author statement
Patricia van Loon: conceptualization, methodology, validation, analysis, investigation, writing, funding
acquisition. Derek Diener: methodology, analysis, investigation, writing. Steve Harris: analysis,
investigation, writing – review & editing.
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Word count: 11446 1
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Circular products and business models and environmental impact 3
reductions: current knowledge and knowledge gaps 4
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Patricia van Loon
1
, Derek Diener
2
, Steve Harris
3
7
1
Chalmers Industriteknik, Sven Hultins Plats 1, 41258 Göteborg, Sweden, patricia.van.loon@cit.chalmers.se
8
2
RISE Research Institutes of Sweden, Lindholmspiren 3A, 41756 Göteborg, Sweden, derek.diener@ri.se
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3
IVL Swedish Environmental Research Institute, Aschebergsgatan 44, 41133 Göteborg, steve.harris@ivl.se
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Abstract
11
The circular economy is billed as a solution to increase economic growth while reducing environmental impact.
12
It is argued that retaining the value of products, components and materials by fostering the “inner loops”, such
13
as reuse, refurbishment and remanufacturing, increases the resource-efficiency. However, published
14
environmental assessments estimating the actual impact of these so-called circular outcomes are inconclusive.
15
This paper presents the results of a systematic literature review of previous environmental assessments on
16
circular products and circular business models, focusing on the tighter technical loops including reuse,
17
refurbishment, and remanufacturing. Mapping reveals factors that influence the environmental impact of
18
circular products and other aspects that should be incorporated in environmental assessments. Even though 239
19
papers were identified that discuss the environmental impact of circular products and/or circular business
20
models, the far majority only considers a traditional product in a traditional sales model that is remanufactured
21
and compares the impacts of remanufacturing with manufacturing new products. While it is important to
22
quantify the impacts of remanufacturing, it is remarkable that product design strategies for circular economy
23
(e.g. design for remanufacturing, upgradability, modularity) and product-service systems or other types of
24
circular business models are usually not considered in the LCA studies. A lack of studies of products with so-
25
called circular designs that are utilized within circular business models is apparent. In addition, many
26
assessments are static analyses and limited consideration is given to future increases in the share of renewable
27
energy. One can thus question how well the available environmental assessments quantify actual circular
28
products/offerings and the environmental performance gains they could provide in a circular economy. The
29
results show that there is an urgent need for more LCAs done in a way that better captures the potential benefits
30
and deficiencies of circular products. Only then will it be possible to make robust claims about the
31
environmental sustainability of circular products and circular business models and finally circular economy in
32
total.
33
34
35
Keywords: Circular economy, Environmental impact, Life-Cycle Assessment, Sustainability,
Rebound
36
effects, Renewable energy
37
38
39
40
41
42
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1. Introduction
1
With the growing world population and increasing material consumption, the pressure on the environment is far
2
from being sustainable. Circular economy (CE) is one concept suggesting that it is possible to reduce the
3
pressure on the environment without limiting the economy. This can be achieved by recapturing value present in
4
a product at its end-of-life and recirculate it in the market via e.g. reuse and recycling (EMF, 2013). Not
5
surprisingly, the concept has received a lot of attention in the recent years. China was one of the first countries
6
to utilize the concept in development of state strategies (McDowall et al., 2017) while the European
7
Commission argues that it “has no choice but to go for the transition to a resource-efficient and ultimately
8
regenerative circular economy” (EC, 2012) and has adopted a CE action plan to close product lifecycle loops
9
via reuse and recycling (EC, 2020).
10
While circular economy as a named concept, field and megatrend is relatively new, it builds on theories from
11
established disciplines, including industrial ecology (Harris, 2004; Chertow, 2007), environmental economics
12
(Ayres, 1998), closed-loop supply chains (Guide and Van Wassenhove, 2001), and cradle-to-cradle design
13
(McDonough and Braungart, 2002). Circular economy is further tangled with other concepts such as the
14
performance economy, blue economy, natural capitalism, regenerative design, and biomimicry (EMF, 2015b).
15
Due to its eclectic nature, it can be argued that circular economy is a bundle of ideas rather than clear concept
16
(Lazarevic et al., 2016). However, at its core, the circular economy refers to the recirculation of goods and
17
materials, i.e. via reuse at product level (for example repair and refurbishment), reuse at component level (such
18
as remanufacturing), and reuse at material level (recycling) (Zink and Geyer, 2017). Thus, while targeting
19
results at the economy or region level, the real change is to be realized at micro level, with firms and individuals
20
producing, distributing and utilizing products and materials in a more ‘resource-effective’ way. In theory, there
21
are a great number of strategies to achieving these changes, with new circular product design and performance-
22
based business models making up the core of suggestions for manufacturing firms (EMF, 2013b).
23
However, whether such strategies always deliver the promised results is debated. Some scholars question the
24
suggested link between circular economy and environmental impact reduction (for example Agrawal et al.,
25
2016; Geyer et al., 2015; Murray et al., 2017). A workshop on the potential effects of promoting circular
26
economy via policies concluded that circular economy can have a positive or a negative environmental effect,
27
depending on outcomes on the micro level (Lucas et al., 2016). Indeed, the impacts of CE strategies are
28
promising but mixed and scantly investigated. Some researchers have argued that certain components of a
29
circular economy, such as product-service-systems (Agrawal and Bellos, 2016; Mont, 2004; Tukker, 2005),
30
reuse (Cooper and Gutowski, 2015), and remanufacturing (Gutowski et al., 2011; Peters, 2016) are not panaceas
31
for environmental sustainability. So far, the environmental performance of circular business models is unclear,
32
and the available literature is scant (Bocken et al., 2016; Manninen et al., 2018).
33
Based on the limitations of current knowledge on the links of CE strategies to environment impact outcomes,
34
there is a clear need for research to learn about the environmental impact of circular products and circular
35
business models and to compare them against the traditional linear offerings. With this need in mind, we pose
36
the following questions: (1) what do we know about the environmental performance of circular products and
37
circular business models compared to linear ones? (2) what does this mean for future life cycle assessments
38
(LCA) of circular products / business models? We notice that many environmental assessments of so-called
39
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circular products are actually products performing in states of design and systems that are geared towards
1
linearity (e.g. sales model and conventional product design) and there is a clear lack of studies assessing the
2
environmental performance of products designed for circular economy and offered in a circular business model.
3
We further conclude that a good knowledge base exists on the environmental impact of the remanufacturing
4
versus manufacturing activities itself but a lack of knowledge regarding environmental impacts of circular
5
products from a life cycle perspective including effects of return transport, energy-efficiency improvements, and
6
consumption.
7
This paper conducts a systematic review of studies assessing the environmental impact of so-called circular
8
products and circular business models. The systematic literature review method is explained in the next section
9
called ‘Methods’. The identified papers are summarized in the next section focusing on key factors that impact
10
upon the environmentally preferred strategy. We distill characteristics that have a determining role in whether
11
circular products are sustainable and reflect on the limitations of the LCA assessments on circular products and
12
business models so far in the ‘Analysis and discussion’ section. Finally, in the conclusion section, suggestion for
13
future research towards the environmental performance of circular products and circular business models is
14
provided.
15
16
2. Methods
17
In order to map the current knowledge and evidence on the environmental performance of circular products and
18
business models, a systematic literature review with content analysis was conducted. We focus on studies that
19
investigate the impacts of ‘slowing resource cycles’ that extend the utilization period of products via for
20
example direct reuse or remanufacturing and reuse rather than closing them via recycling (Bocken et al., 2016b)
21
as larger environmental impact gains are to be expected from so-called tighter loops. While processes like
22
remanufacturing may alter the product in some manner, it keeps the product intact meaning it requires fewer
23
changes to recover value as opposed to recycling, which involves breaking the product down to the material or
24
substance level and starting over. Hence, as general rule, it is argued that remanufacturing results in higher
25
environmental savings than recycling (EMF, 2013b), though proof supporting this distinction is lacking
26
(Sehmen et al., 2019). However, considering this differentiation, for the purpose of this study, we exclude
27
studies on recycling and focus instead on papers that quantify the environmental impact of so-called circular
28
products and solutions, those that aim to achieve reuse of the product or its components via direct reuse or
29
remanufacturing.
30
The systematic literature review process and principles as outlined by Tranfield et al. (2003) was followed. A
31
systematic literature review has as aim to map and evaluate the body of literature to identify potential research
32
gaps and highlight the boundary of knowledge” (Braz et al., 2018). The research was constructed following the
33
three stages of the systematic literature review process: stage 1 - planning the review, stage 2 conducting the
34
review, and stage 3 – reporting and dissemination.
35
2.1. Stage 1 – planning the review
36
A research protocol that outlines the search strategy and inclusion and exclusion criteria was developed and
37
discussed by the authors of this paper in early 2018. Since the purpose of the literature search was to find
38
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evidence on the environmental performance of circular business models and circular products, a wide and cross-
1
disciplinary focus was taken. Hence, a broad array of keywords were included in the search, consisting of
2
circular economy, circular products, circular business models, closed-loop supply chains, remanufacturing,
3
refurbishment, upgradability, and product life extension in combination with environmental impact, LCA, or
4
environmental performance (see Figure 1). Recycling is not the focus of this study and therefore not included in
5
the keywords. Boolean operator AND was used to combine keywords from the first column with keywords from
6
the first row, while keywords within the same column or row were separated with the operator OR. Papers were
7
searched in early 2018 using Scopus and the search is updated (using the same search string) with recent papers
8
in early 2020. Scopus is one of the largest multidisciplinary databases with over 70 million documents and is
9
found suitable as principle search system for systematic literature reviews (Gusenbauer and Haddaway, 2019). It
10
covers a variety of disciplines including management, engineering, economics, social science, and
11
environmental science (Scopus, 2020), providing a relevant database for the topic of this study. The search was
12
limited to keywords hits in either title, abstract or keywords, papers written in English, and published in
13
journals. The reference lists of the identified papers were further checked and discussions with academic
14
colleagues
1
were held to identify papers that we might have missed in the search.
15
2.2. Stage 2 – conducting the review
16
After removing the duplicates and reviewing the title, 273 articles were identified that could potentially fit the
17
scope. Those were further screened by first abstract and followed by full text on eligibility based on the
18
inclusion, exclusion, and quality criteria. In line with earlier research (i.e. Kaddoura et al., 2019) we find that
19
many of the papers on CE have a qualitative approach and mention the environmental impact and importance of
20
environmental aspects in relation to circular products or circular economy in general without quantifying the
21
environmental impact and without studying real industrial cases. In order words, many of the papers found that
22
have “environmental impact” or “environmental performance” in the title, abstract or keywords do not present
23
an environmental assessment themselves but rather discuss that it could have important implications on the
24
environment. For the purpose of this study in which we map the evidence regarding environmental impact of
25
circular products and circular business models, we limit the papers to those that quantify the environmental
26
impact of circular products / business models (i.e. those discussing a case study or practical application) to
27
establish how much, where, and what evidence exists. We focus on micro-level impacts excluding papers that
28
discuss environmental impacts of cities or regions transitioning towards circular economy. Only 54 of these 273
29
papers quantify
30
the environmental
31
impact of one or
32
several circular
33
products, resulting
34
in 93 cases.
35
36
1
Discussions took place during conferences (ERSCP 2019 and LCM 2019) as well as informal discussion utilizing
existing networks.
# hits in Scopus Environmental impact LCA
Environmental performance
Circular economy 380 220 95
Circular products 5 0 1
Circular business models 15 7 3
Closed-loop supply chains 74 11 22
Remanufacturing 191 46 50
Refurbishment 105 59 31
Upgradability 3 2 1
Product life extension 4 0 1
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1
2
3
4
Removing duplicates and screening title
5
Assessing paper on content and quality using
the pre-defined criteria. Main inclusion criteria:
quantitative environmental assessment of
circular products or business models, case
study.
6
7
8
Figure 1: Data collection and selection process.
9
10
2.3. Stage 3 – reporting and dissemination
11
The cases were classified based on product type studied, noted product design strategies and business models
12
for circular economy, the inclusion of rebound effects and effect of transition to low-carbon energy. The results
13
were summarized. A list of all papers and cases and the classification can be found in the supplementary data.
14
Together, the papers and their descriptions represented a collection of analyses of circular products. This
15
collection provided two main insights; (1) indications of how circular products and circular business models
16
might fare environmentally and what characteristics of the product systems are important to environmental
17
performance outcome and (2) insights into how analyses are done. From the assessment of the analyses, we
18
generate lessons learned related to methods and approaches to assessing environmental impact of circular
19
products and business models.
20
21
3. Results
22
The papers provide a collection of analyses of products that undergo so-called circular processes (see Table 1).
23
This collection gives us indications of the potential environmental sustainability of ‘circular’ products. Given
24
the apparent lack of studies on the environmental impact of products designed for circular economy and within a
25
circular business model, we summarize this collection in three sections considering what circular strategy
26
(design or business model) is observed for the circular outcomes analyzed; (1) products that exist with a design
27
and business model that is not modified - it is made for a linear product (no circular strategy), (2) products that
28
have a design that is ‘intended’ for circular use (circular product design) and (3) products that are offered within
29
an alternative circular business model. Note that we did not identify papers that quantified the environmental
30
273 papers
5
4
1326 papers
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impact considering both a circular product design AND a circular business model. Table 1 provides an overview
1
of the papers and moreover case products in each category.
2
3
[table 1 somewhere here]
4
5
3.1. Summary of papers looking at recirculating but without changing products design or business model
6
A few papers calculate the environmental impact of reusing products (direct reuse) compared to manufacturing
7
them new. Woolridge et al. (2006) assess the benefits of cotton and polyester clothing reuse by calculating the
8
energy use of Salvation Army operations in the UK. Perhaps unsurprisingly, they conclude that the total energy
9
use of collection, sorting, baling, selling and distribution the used clothing is a fraction of the energy required to
10
manufacture them from primary materials. Low et al. (2016) calculate the environmental impact of reusing flat-
11
panel display monitors via second-hand sales and conclude that reuse leads to less material and resources used
12
in the production process leading to environmental benefits. However, the use phase is out of scope, which is
13
notable for a product that uses energy during use.
14
More papers explore the environmental impact of recirculating products via refurbishment or remanufacturing
15
and compare the impacts of such process against the impacts of producing new counterparts. Benton et al.
16
(2017) (diesel generator set) and Gao et al. (2017) (turbocharger) conclude that remanufacturing recovers most
17
of the embodied energy and therefore leads to significant environmental benefits. Similarly, Afrinaldi et al.
18
(2017) and Liu et al. (2016) demonstrate significant energy savings when remanufacturing a cylinder block due
19
to the reuse of materials compared to using raw materials in the production of new engines. Van Loon and Van
20
Wassenhove (2017) assume that a remanufactured chassis product replaces a new one and find that
21
remanufacturing results in a reduction in CO
2
emissions. Smith and Keoleain (2004) and Zheng et al. (2019)
22
similarly conclude a large reduction in environmental impact from remanufacturing engines. However, these
23
studies ignore the use (and disposal phase) which essentially means that the results are representative only if the
24
efficiency of a new engine is the same as the refurbished one. Kwak and Kim (2016) further showed that
25
remanufacturing alternators saves between 70 and 35% (depending on the remanufacturing yield rate) of the
26
greenhouse gas emissions associated with new production and Warsen et al. (2011) assessed life cycle impacts
27
of remanufactured versus new manual auto transmissions and find 30-45% reductions for all categories.
28
In general, it can be argued that the remanufacturing process yields benefits in terms of resource-efficiency
29
compared to the manufacturing process (Allwood et al., 2011; Sundin, 2004; Ijomah et al., 2007), but one can
30
question the benefits if the remanufacturing processes allow less efficient, energy-demanding units to be
31
economically repaired and renewed, hence allowing them to live longer and potentially resulting in more
32
environmental impact than if they had been replaced with new ones or by none at all (Linder et al., 2018).
33
Several researchers looked into the question whether it would be better to keep using a product or to switch to
34
newer models with improved efficiency in the use phase. Gutowski et al. (2011) assessed the energy savings
35
reached through remanufacturing 25 different product types. Resulting energy savings from remanufacturing
36
(assuming it allows an equally long second life) was a mixed bag with 8 cases that saved energy, 6 did not, and
37
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11 to close to call. They concluded that remanufacturing generally results in life cycle energy savings for
1
products that do not require energy during use (or require very little), however, remanufacturing generally does
2
not result in energy savings for products that have a large energy requirement in the use phase and for which the
3
energy-efficiency is increasing significantly for newer generations. Similarly, Iraldo et al. (2017) presents LCA
4
results from three types of energy-intensive equipment; refrigerators, freezers, and electric ovens. When
5
considering energy-consuming products, the savings in material and production by extending the product life
6
are weighed against the use of an older and in many cases less energy-efficient product. They illustrated, in line
7
with Ardente et al. (2018), that durable products mainly save on environmental impact categories associated
8
with the manufacturing phase, e.g. human toxicity, freshwater ecotoxicity, and resource depletion. On the other
9
hand, environmental impact categories related to energy consumption during the use phase show a larger
10
environmental impact for extended product life. For some product cases, life cycle climate change reductions
11
can be achieved when new replacement products are only minutely more energy-efficient than their older
12
counterparts. They note that small efficiency improvements (5-20%) in the use phase are enough to justify
13
replacement environmentally. When the use phase is included in the environmental assessment in order to
14
include energy-efficiency improvements or product deterioration over time, the environmental benefit of
15
remanufacturing some products becomes less positive. For example, De Kleine et al. (2011) and Kim et al.
16
(2006) argue that deterioration in operating efficiency, like that seen when residential air conditioners or
17
refrigerators become older and less energy-efficient, significantly reduces the optimal lifetime of the product
18
and hence should be included in the environmental assessment.
19
Some consideration has been made to what product characteristics determine the most environmentally friendly
20
strategy, extend or replace with new. Iraldo et al (2017) and also Ardente and Mathieux (2014) concluded that
21
the most environmentally friendly strategy depends mainly on a few factors:
22
1) the lifetime of the products,
23
2) energy consumption of the product,
24
3) impacts due to lifetime extension, and
25
4) efficiency of the replacement product.
26
For example, extending the product life of smartphones is beneficial from an environmental point of view since
27
a large share of the impacts are generated in the manufacturing stage. On the other hand, washing machines are
28
a type of product that might be better replaced due to the increased energy-efficiency in the new product (Kwak,
29
2016). Similarly, Intlekofer et al. (2010) assessed replacement scenarios for computers and household
30
appliances and recommended longer lives (than the normal 4 years) for computers (manufacturing is a large part
31
of the total environmental impacts), but on the other hand shorter lives for washers and dishwashers (with a
32
relatively high energy use in the use phase). Tasaki et al. (2013) conducted a relatively similar assessment on
33
refrigerators, TVs, and air conditioners and concluded that lifetime extension is mainly beneficial for products
34
that have a comparably higher environmental impact in the manufacturing stage than the use phase. Cheung et
35
al. (2018) argues that LCD projectors should only be remanufactured if newer models are not significantly more
36
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energy-efficient. Bakker et al. (2014), on the other hand, concluded that the optimal lifetime for today’s
1
refrigerators and laptops in regards to environmental impacts are significantly longer than their average
2
lifetimes.
3
Another factor that impact the optimal lifespan from an environmental point of view is consumer behavior, i.e.
4
usage intensity of the product (Tasaki et al., 2013). Perez-Belis et al (2017) argued that the environmental
5
impact depends on consumer behavior which makes it impossible to define one optimal strategy that holds in all
6
situations. Bobba et al. (2016) showed in their LCA on vacuum cleaners that extending the product life of
7
vacuum cleaners will in almost all cases lead to environmental benefits, unless the new replacement vacuum
8
cleaner is 25% more energy-efficient.
9
It is important to note that these conclusions are greatly dependent on the type of energy source used, a point
10
that is conspicuously absent – not even mentioned in many of these studies. Iraldo et al. (2017) notes electricity
11
mix being an important parameter in their literature review, though no electricity mix is explicitly stated
12
(electricity is only discussed in regards to price), and the sensitivity related to this parameter is not discussed
13
(even though energy-efficiency and other factors are assessed thoroughly). While the burdens resulting from
14
extending the life of energy intensive products via remanufacturing is amplified if the product is used in fossil-
15
based systems (internal combustion engine vehicles) or fossil-heavy regions, these burdens can become
16
negligible if the product is to be used in fossil-free (low-carbon) systems or regions. Most studies do not specify
17
the exact energy mix used in their LCA and provide no sensitivity analysis on the impact of the chosen energy
18
mix on their results (see supplementary data) making it difficult to explore the impact of changing energy mixes
19
on this conclusion. One exception is Richter et al. (2019), who include decarbonization of the electricity mix in
20
their LCA study on LED lamps. They show that the assumption on electricity mixes influences the outcome of
21
replace early versus increase durability. The conclusion that energy consuming products with fast technological
22
advancement should be replaced early, like for LED lamps, is dependent on the electricity mix. In a
23
decarbonized electricity context, it appears better to increase the lifespan of the lamps.
24
Another key point that deserves further discussion is the assumption about reused products replacing new ones
25
and not merely adding available units to the pool/stock. The studies above usually assume that a reused or
26
remanufactured product substitutes a newly manufactured product. A more nuanced view is taken in operation
27
research literature, where the impact of remanufacturing on the overall demand and consumption of products is
28
included in the environmental assessments. Remanufacturing drives down the prices of the product, which
29
increases sales (Raz et al., 2017), both through imperfect substitution as well as re-spending money elsewhere
30
on other products (Makov and Font Vivanco, 2018). A 1:1 perfect displacement, as is often assumed in
31
environmental assessments, is not realistic (Peng et al., 2020; Makov and Font Vivanco, 2018). Rebound effects
32
lead to an overall higher environmental impact when the impact of increased consumption is higher than the
33
savings from substituting some new products with remanufactured products (Raz et al., 2017; Xiong et al.
34
2016). Due to the higher overall demand the absolute environmental performance of a system with and without
35
remanufacturing are less clear, even if the environmental impact of remanufacturing a unit of product is
36
significantly lower than producing a new unit (e.g. Esenduran et al., 2016; Shi et al., 2016). It is likely that
37
remanufacturing items with a relatively high environmental impact during the use phase leads to higher system
38
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wide environmental impacts due to the higher supply/demand (Esenduran et al., 2016; Liu et al., 2017). On the
1
other hand, a study on smart phones (Makov and Font Vivanco, 2018) show that while rebound effects diminish
2
some of the environmental benefits of the circular system, it still leads to lower environmental impact in total in
3
most, but not all, cases. More research towards the rebound effects and how it influences the environmental
4
performance of circular products and circular economy in general is urgently needed.
5
3.2. Summary of papers looking at recirculating coupled with a new (circular) product design
6
Few environmental studies include possible (circular) design changes in their assessment. A good circular
7
product design from an energy use point of view depends on the product characteristics: if the product is subject
8
to no or very small energy-efficiency improvements, designers might want to focus on durability of the product,
9
while on the other hand, designers might want to prioritize modularity and upgradability of energy consuming
10
parts if large energy-efficiency improvements are to be expected (Cooper and Gutowski, 2015). Kerr and Ryan
11
(2001) assessed the environmental impact of remanufacturing a photocopier compared to producing a new one.
12
They found that a copy machine with a modular design can reduce the environmental impact further than a non-
13
modular conventional design, although in both cases remanufacturing leads to significant environmental
14
savings. Their study is however indicative and focuses only on the impacts of the manufacturing /
15
remanufacturing process itself. Kwak and Kim (2016) assessed the remanufacturing of desktop PCs assuming
16
that some parts need to be replaced in the remanufacturing process due to obsolescence including changing
17
customer preferences. They showed that while the remanufacturing process requires significantly less
18
greenhouse gas emissions than manufacturing new desktop PCs, this advantage can be completely offset by the
19
usage impacts if a significant amount of energy-efficiency increase was realized between the two models.
20
Taking into account the average lifespan of desktop PCs and the energy-efficiency improvements over time, the
21
authors argue that remanufacturing is not beneficial. However, they also argue that product design can be
22
optimized to improve the benefits of remanufacturing and that further research towards product design and the
23
value of remanufacturing is needed (Kwak and Kim, 2016). Similarly, Sabbaghi and Behdad (2017) argue that
24
the environmental impact of remanufacturing versus manufacturing new computers heavily depend on the
25
repairability and reusability of the product.
26
Krystofik et al. (2017) assessed the environmental impact of remanufacturing office furniture – a no energy
27
consuming product susceptible to fashion changes, making the products obsolete if they cannot be upgraded
28
during the remanufacturing process. The authors argue that design for upgradability allow the product to meet
29
current demand and hence results in a much longer lifespan reducing the environmental impacts per use.
30
Kaddoura et al. (2019) quantify the environmental impact of another no energy consuming product, a door
31
handle of a waste inlet. They show that by redesigning the door handle to make it repairable, the lifetime of the
32
door can be prolonged hence resulting in lower environmental impacts.
33
3.3. Summary of papers looking at recirculating coupled with a new (circular) business model
34
Few studies empirically investigate the environmental performance of servicized or product-service systems
35
(PSS) as compared to traditional ownership models. A servicized business model is one in which the ownership
36
of the product remains with the company in combination with a pay-per-use pricing structure (Agrawal and
37
Bellos, 2016). Tornese et al. (2018) assess the impacts of reusing pallets in a pooling system compared to using
38
pallets only once. They found that the CO
2
emissions of repair is only a fraction of the emissions of
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manufacturing new pallets and the overall environmental impact depends largely on the handling/loading
1
conditions of the pallets and transportation distances. Tua et al. (2019) show that reusable plastic crates for
2
transportation of fruit and vegetables will have to be used three times in a pooling system to have lower
3
environmental impacts than single-use crates. Using renewable energy in the reconditioning process would
4
improve the environmental performance of reusable crates further. Bech et al. (2019) shows that a PSS system
5
of T-shirts for the army which result in product life extension through longer use and repurposing of the T-shirts
6
and where T-shirts are washed less and at a lower temperature, will reduce the greenhouse gas emission
7
significantly, even though the environmental impact of one T-shirt is higher due to increased durability and
8
quality. Kaddoura et al. (2019) quantify the environmental impact of a beach flag and event tent when sold and
9
used one time versus a business model where the manufacturer retains the ownership and refurbishes and reuses
10
the items several times. Hoffmann et al. (2020) explores the environmental impact of having a pay-per-use
11
system for cloth diapers versus using disposable diapers. Lindahl et al. (2014) shows the environmental impact
12
of three product-service systems and compares them to their linear counterpart sales offer. In their first case
13
study, the authors study core plugs for paper mills and argue that PSS increases the number of times such core
14
plug is reused and hence the environmental impact is reduced. In their second case study, they compare different
15
exterior building cleaning methods and argue that the service will reduce the time needed for cleaning and
16
therefore reduce the environmental impact. Thirdly, they compare soil compactors where more durable soil
17
compactors are manufactured and maintained in the PSS system. Also here, an environmental benefit is shown
18
compared to producing a linear product that has a shorter lifespan. However, from the paper it is unclear in how
19
far new technologies are the reason for the environmental impact and in how far the PSS offers really made a
20
difference in the usage behavior of the product.
21
It is argued that PSS would stimulate the original equipment manufacturer (OEM) to reduce their production
22
volume and therefore contribute to resource-efficiency. Because customers pay depending on the usage of the
23
product, it is anticipated that consumers will use the product less frequent. On the other hand, people with low
24
usage intensity might be more inclined to use the product if they can pay for only their use and not have to buy
25
the product (Agrawal and Bellos, 2016). These changes in customer behavior contribute to rebound effects and
26
should be included, or at least considered, in environmental assessments to capture the full environmental
27
effects of shifting to circular business models (Dal Lago et al., 2017; Kjaer et al., 2018). The new offer might
28
also substitute other products than the initial product and finding data on this substitution and rebound effect is
29
challenging, especially in the early design phase (Kjaer et al., 2016). Demand for a product depends on the
30
pricing of the product and hence pricing decisions and subsequent demand should be included in environmental
31
calculations (Agrawal and Bellos, 2016). To complicate things further, the scant research available has shown
32
that the reliability and energy-efficiency of the product might change when companies shift from a linear to a
33
circular business model (Agrawal and Bellos, 2016; 2016b).
34
In principle, PSS shift the focus from product to the function it provides or its availability, which means that the
35
environmental impact should be calculated over the function delivered (including related environmental impacts
36
of required products and activities to deliver the function) instead of calculating the environmental impact over
37
one product. It is argued that the selection of the functional unit in a PSS is therefore an arbitrary process (Dal
38
Lago et al., 2017). While PSS is a relative new concept, selecting the right functional unit is a key concept in
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LCA practice and is presented in even early LCA handbooks. For example, functional units as ‘watching TV for
1
one hour’ (Guinee et al., 2002, Part 3 p 78), ‘1000 hours of light’ (Guinee et al., 2002, Part 3 p 82), or ’20 m2 of
2
wall covering with a thermal resistance of 2 m2 K/W, with a colored surface of 98% opacity, not requiring any
3
other painting for 5 years’ (Guinee et al., 2002, Part 2a p22) are described, referring clearly to the function or
4
performance instead of the product.
5
4. Analysis and discussion
6
The collection of studies gives us insights not only into products and the potential of circular products in regards
7
to reducing (relative) environmental impact, they also give us insights into the common methods and norms
8
followed when conducting LCA of products.
9
4.1. Key factors for determining environmental impact of circular products
10
Based on the assessments of circular products collected (and listed in section 3), several product or industry
11
characteristics can be identified that seem to have a determining role in whether a product will be suitable for a
12
circular economy, meaning that recirculating such products will reduce the environmental impact compared to
13
producing only new products.
14
Extending product life: A first prerequisite to reduce a product’s environmental impact is the ability to
15
extend product life via extended usage duration, reuse and/or remanufacturing. Extending the life of
16
products can result in greatly reduced environmental impacts; more overall function is achieved while
17
the impacts from material extraction and manufacturing stay depending on what components have to
18
be replaced to achieve reuse close to the same. As a general rule, it is beneficial to extend the life of
19
products that have a relatively high share of total environmental impacts in the manufacturing phase
20
while, it is not beneficial to extend the life of products that have a relatively high share of environmental
21
impacts in the use phase, that is, if new products exhibit better use-phase energy-efficiency.
22
Efficiency and environmental burdens during use: Some products deteriorate over time, leading to
23
higher energy or resource consumption than when the product just came on the market. If the
24
deterioration is relatively large, the product can perhaps better be replaced instead of being used rather
25
inefficiently. Similarly, if new products have become more energy-efficient due to new innovative
26
technologies, it will be better to replace the product instead of extending the use of inefficient old
27
technologies. The exact moment of replacement that leads to the lowest environmental impact depends
28
on the electricity mix and usage intensity. Heavy used energy-consuming products have a relative larger
29
share of the environmental impacts in the use phase. It might therefore be better for a heavy user to
30
switch to a newer model while low-intensity users might be better off by keeping their current product.
31
Point of obsolescence: When exactly the product is replaced does not only depend on the technical
32
lifespan of the product (i.e. how long the product functions), it is for a large part also determined by the
33
user. Customers might decide to no longer use the product for different reasons; aesthetical, economical,
34
functional, technological, or social reasons (Burns, 2010). When the customer perceives the product as
35
obsolete, the product may be discarded. Products in innovative markets might be discarded far before its
36
technical lifespan is reached and efforts to extend the technical lifespan are meaningless if the product is
37
not used that long.
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The collection of studies seems to indicate that some products might be more suitable for circular economy than
1
others, with in particular white goods being less suitable (see table 1). White goods have a relatively high
2
environmental impact in the use phase which leads, in combination with the high degree of innovation in terms
3
of reached energy-efficiency, to replacement being the more optimal strategy above product life extension
4
through reuse and remanufacturing. For another group of products, the most optimal strategy in terms of
5
environmental impact depends on usage behavior (intensity of use) and innovation speed and can be either
6
product life extension or replacement depending on the circumstances. The impact of innovation on
7
environmental impact need to be explored further.
8
As widely argued, a manufacturing company can invest in designing their products/business in such way that
9
some of the above-mentioned impacts are minimized. Product design can influence the lifespan of the product,
10
the maintenance and repair activities needed during the use phase, energy and other resource consumption in the
11
use phase, and the recirculation possibilities (e.g. recycling) after use. Product design can also help to keep
12
products relevant longer by allowing upgrades that will mitigate obsolescence (Cooper, 2010). For example,
13
designing products with product life extension in mind including the necessary activities that need to be
14
performed to reach that (such as design for disassembly and remanufacturing), might help in reducing the
15
impacts from these activities. Energy-efficiency improvements can be incorporated in the ‘old’ product by
16
replacing the energy-consuming components during remanufacturing via design for upgradability and
17
modularity. However, as pointed out above, the environmental impacts of design for upgradability and
18
modularity are ambiguous as these design strategies might also lead to additional demand from customers.
19
In a similar vein, business models may influence how products are used. For example, OEMs may incentivize
20
product return leading to high return and reuse rates but also changing user behavior in unforeseen ways.
21
However, that does not necessarily mean that the alternative to the OEM-controlled model results in only one
22
use of the product. Independent remanufacturers and second-hand markets can also lead to high reuse-rates.
23
Business models might further influence the usage duration depending on if people have purchased the product,
24
are leasing the product, or are paying on a pay-per-use basis. Knowing what will happen with the product and
25
how it will be used after putting it on the market can be very difficult. More research will be needed in order to
26
be able to conduct quantitative environmental assessments of various circular business models.
27
4.2. Environmental impact assessments methods
28
While there are numerous environmental impact assessment methods, LCA is largely considered as the leading
29
tool to assess the environmental impact of circular products (Haupt and Zschokke, 2017). However, when
30
applying LCA to circular products, a couple of potential issues arise (Elia et al., 2017).
31
Peters (2016) argues that a long-term consequential LCA that looks at the environmental effects of
32
remanufacturing systems (i.e. expanding system boundaries to calculate the environmental effect of a system
33
where products are manufactured and remanufactured including remanufacturing yield rates etc. and compare
34
them against a system where all products are manufactured new) is the most appropriate, realistic and accurate
35
view. Unfortunately, due to data limitations, some LCA studies only compare a single new product with a
36
successfully remanufactured product. Therefore, they only compare the direct impacts of the manufacturing and
37
remanufacturing processes, but do not include the wider system impacts from products that cannot be
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successfully remanufactured. Similarly, new services and their related impacts (for example infrastructure and
1
buildings) of a circular business model need to be included in the LCA for a fair comparison with linear
2
business models (Kjaer et al., 2018).
3
Rebound effects, although mentioned in several papers, are so far (almost) not addressed and incorporated in the
4
environmental assessments identified in this paper. It is argued, however, that even if circular economy would
5
be implemented to its fullest extent, the rebound effects will lead to an overall growing use of materials and
6
increasing our impact on the environment (Korhonen et al., 2018). For example, the availability of (cheaper)
7
used products may merely increase consumption by allowing consumers to afford and own more products (Zink
8
and Geyer, 2017). The question therefore becomes: Does the availability of used products actually displace
9
manufacturing of new products? Several ways to include rebound effects in environmental assessments are
10
suggested. Thomas (2011) suggests parameterizing individual’s buying habits and proposes a set of equations
11
which are to be an economics-based foundation for assessing to which degree buying used products replaces
12
buying new in a given market. Farrant et al. (2010) takes a different approach and translates consumer behavior
13
– as described via a survey – into levels of replacement of new production. They assume that purchases made by
14
people that usually or always buy clothes at second-hand markets replace new production, whereas those
15
purchases made by those who do it seldom, looking for "unnecessary" extra things, replace less new production
16
(per purchase) as they are considered superfluous. However, one could consider that the mere availability of
17
second-hand clothes that are cheaper increases purchasing power. Moreover, the presence of a second-hand
18
market may increase the incentive of people to replace their "used" clothes with new ones, knowing that they
19
can get some of their investment back and that the clothes will be used by someone else anyway (reducing
20
moral burden). Research on the various customer segments and their sizes is in its infancy (Abbey et al., 2015).
21
These types of outcomes demonstrate a limitation in especially assessments of relative environmental impact.
22
This suggests a need to consider changes in consumption patterns and how it affects absolute system wide
23
environmental impact.
24
Finally, it has been suggested that it is important to consider larger (societal/macro) changes towards CE when
25
modelling the environmental impact of circular products on micro level. Harris et al. (2021) highlight the
26
potential of the societal needs/functions framework to provide a meso level link between the micro and macro
27
levels. This can additionally help link environmental assessment at the different levels and aid the analysis and
28
monitoring towards CE. Future analysis also requires consideration of the shift to electricity production with
29
lower carbon intensity (Haupt and Zschokke, 2017; Richter et al., 2019). While some argue that renewable
30
energy is one cornerstone of the CE vision (EMF, 2013), most studies gathered do not explicitly assess
31
electricity mix nor do they consider what effects changing to renewable energy sources would have. Regardless
32
of one beliefs regarding renewable energy being part of CE or not, assessing a product’s true long-term
33
compatibility with CE should consider not only the current state of fossil-based energy system in which one
34
may be incentivized to innovate on short cycles and build short-lived products in order to gain ‘energy-
35
efficiency’— but future energy states as well.
36
5. Conclusions
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This paper mapped and combined the knowledge available on the environmental impact of circular products and
1
circular business models and showed large deficits in the existing evidence. While the studies show that the
2
remanufacturing process itself, compared to manufacturing new items, results in many cases in lower
3
environmental impact, these studies provide only one piece to the puzzle regarding the question whether CE will
4
improve resource-efficiency. Broader impacts, from e.g. return transports and not reusable items, energy-
5
efficiency improvements and degradation, and rebound effects complicate the answer. It is remarkable that,
6
despite circular product design and circular business models strategies being central concepts within CE, there
7
appear to be limited studies focusing on assessing their environmental performance. Product design strategies
8
for circular economy, for example modularity, upgradability, repairability, etc., can, in theory, counteract some
9
of the negative consequences of extending the product lifetime, but its effect on consumer behavior and hence
10
the overall effect on environmental impact is poorly researched so far. Similarly, the effect of circular business
11
models on consumption is not yet included in the environmental assessments. Most studies seem to assume a
12
static world where the introduction of the circular product have no impact on consumption. Especially when
13
considering circular business models, function instead of products need to be the unit of analysis implying the
14
inclusion of potential changes in consumption. Hence, we see an urgent need for a better understanding of the
15
environmental impact of circular products and call for papers that incorporate the role of circular product
16
design, circular business models, and consumption into their environmental assessments.
17
Most papers focus on the environmental impact of circular products in today’s world including the current
18
existing electricity mix. While this is absolutely not wrong to do, it does ignore the transition towards a
19
decarbonized electricity mix and hence limits the usefulness of the study to today’s world. In order words, we
20
do not know enough yet about the environmental impact of circular products in the long term, not even if
21
product life extension is the way forward and under which circumstances. Larger societal CE changes, like
22
switching to renewable energy, are not often incorporated into the environmental assessments of circular
23
products. Future research should include, or at least reflect, on these aspects to provide a coherent and complete
24
answer on the question whether circular products are indeed environmentally preferred to linear products or as
25
importantly, how to make sure they will be.
26
To the best of our knowledge, this is the first paper that combined the available evidence and knowledge on the
27
environmental impact of circular products and circular business models by collecting and assessing
28
environmental assessments. The paper is limited to environmental impact of circular products and business
29
models, taking a micro-level perspective, and excluding thereby the effects of transitioning toward circular
30
economy at meso- and macro-level. Moreover, while it attempts to collect the knowledge on environmental
31
impact, the majority of the conclusions, due to limitations in the collected studies, is based on greenhouse gas
32
emissions. The change to circular products has not only an effect on greenhouse gas emissions but also on
33
material and resource consumption, toxicity, particulate air pollution, acidification, eutrophication, waste
34
generation, to name a few. What the most optimal strategy for a product is might differ depending on what
35
environmental impact category one looks at (see for example a study on tools sharing, Martin et al.
36
forthcoming) and knowledge on different environmental impact categories need to be extended and combined.
37
This paper did further not discuss any implications on economic or social sustainability of circular products,
38
which are important for a successful transition towards the circular economy. Instead we focused on mapping
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the existing knowledge on the environmental impact of circular products and business models and conclude that
1
there is an urgent need for future LCAs to study the environmental impact of circular product design and
2
circular business model including changes in consumption, return transport and not reusable items, and energy-
3
efficiency improvements and degradation.
4
5
Acknowledgement
6
This work was supported by the Swedish Environmental Protection Agency (Research project LinCS, project no
7
802-0097-17).
8
9
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1
Table 1: overview of case products and papers in each category.
1
Circular
economy
perspective
Traditional product with traditional sales model assessed Circular product with traditional
sales model assessed Traditional product with circular
business model assessed
Leads to lower environmental
impact Higher or
lower, depends
on conditions
Leads to
higher
environmenta
l impact
Leads to
lower
environmen
tal impact
Higher
or
lower,
depends
on
conditio
ns
Leads to
higher
environmen
tal impact
Leads to
lower
environmen
tal impact
Higher
or
lower,
depends
on
conditio
ns
Leads to
higher
environmen
tal impact
Reuse Books
1
, clothing
2,3,4
, furniture
(desk, chair)
3
, consumer
electronics (laptop, flat-panel
monitor, smartphone)
5,6,7
,
recycling bin
8
, toner cardridges
3
,
storage locker
8
.
Consumer
electronics
(desktop
control unit,
laptop,
monitors)
3
White goods
(refrigerator)
9
Clothing (t-
shirt)
10
,
crates
11
,
diapers
12
,
event tent
8
,
flag
8
Pallets
13
Remanufactur
ing Automotive components
(cylinder block, electric vehicle
battery, engine, alternator,
transmission)
14,15,16,17,18,19,20,21,22,2
3,24,25,26
, bearings
27
, consumer
electronics (cell phone, LCD
monitor, LCD projector)
28,30
,
compressor
29
, loading
machines
31
, machine tools
32
,
paper folding machine
33
,
server
34
, telecommunication
equipment
35
.
Automotive
component
(electric
motors,
engines, tires)
3
,
consumer
electronics
(video game
console)
36
,
vehicle
37
, white
goods
(refrigerator)
38
.
Mobile
phone
39
, white
goods
(refrigerators,
dishwasher,
washing
machine)
3,28
.
Copier
40
,
office
furniture
41
.
Desktop
PC
22
.
Lifetime
extension Consumer electronics (laptop,
computer, cell phone)
42,43,44
,
vacuum cleaner
45
.
Airconditioning
4
6,47
, consumer
electronics
(TV)
47
, LED
lamps
48
,
vacuum
cleaner
49,
vehicle
50
.
White goods
(dishwashers,
oven,
refrigerators,
washing
machines)
43,44,
47,51
Waste
collection
inlet
8
Consum
er
electroni
cs
(laptop)
5
3
Core
plugs
54
,
building
cleaning
54
,
soil
compactor
54
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2
1
Thomas (2011),
2
Farrant et al. (2010),
3
Gutowski et al. (2011),
4
Woolridge et al. (2006),
5
Andre et al. (2019),
6
Low et al. (2016),
7
Makov and Font Vivanco (2018),
8
1
Kaddoura et al. (2019),
9
Kim et al. (2006),
10
Bech et al. (2019),
11
Tue et al. (2019),
12
Hoffmann et al. (2020),
13
Tornese et al. (2018),
14
Afrinaldi et al. (2017),
15
Liu et al.
2
(2016),
16
Benton et al. (2017),
17
Bobba et al. (2018),
18
Cusenza et al. (2019),
19
Gao et al. (2017),
20
Lonca et al. (2018),
21
Smith and Keoleian (2004),
22
Kwak and Kim (2016)
3
,
23
Van Loon and Van Wassenhove (2018),
24
Warsen et al. (2011),
25
Xiong et al. (2020),
26
Zheng et al. (2019),
27
Diener and Tillman (2015),
28
Esenduran et al. (2016),
29
4
Biswas and Rosano (2011),
30
Cheung et al. (2018),
31
Lishan et al. (2018),
32
Du et al. (2012),
33
Peters (2016),
34
Ardente et al. (2018),
35
Goldey et al. (2010),
36
Wang et al.
5
(2017),
37
Latham (2016),
38
Liu et al. (2017),
39
Raz et al. (2017),
40
Kerr and Ryan (2001),
41
Krystofik et al. (2017),
42
Bakker et al. (2014),
43
Intlekofer et al. (2010),
44
Kwak
6
(2016),
45
Bobba et al. (2016),
46
De Kleine et al. (2011),
47
Tasaki et al. (2013),
48
Richter et al. (2019),
49
Perez-Belis et al. (2017),
50
Kim et al. (2003),
51
Ardente and Mathieux
7
(2014),
52
Iraldo et al. (2017),
53
Sabbaghi and Behdad (2017),
54
Lindahl et al. (2014).
8
9
10
11
12
13
14
Supplementary data: Overview of papers calculating the environmental impact of circular products (lower environmental impacts when remanufacturing / reusing /
15
extending life than producing new product,uncertain outcome depends on conditions, ↗ remanufacturing / reusing / extending life lead to higher environmental impact
16
than producing new product)
17
18
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3
Paper Product Circular Economy
perspective
Result Circular
product
design
Circular
business
model
Rebound
effects
Energy mix and
other long-
term CE
changes
Woolridge et al. (2006) Clothing Reuse
Low et al. (2016) flat-panel display monitor Reuse
Benton et al. (2017) Diesel generator set Remanufacturing
Gao et al. (2017) Turbocharger Remanufacturing
Afrinaldi et al. (2017) Cylinder block Remanufacturing
Liu et al. (2016) Cylinder head Remanufacturing
Van Loon and Van
Wassenhove (2018)
Chassis products Remanufacturing
Smith and Keoleian (2004) Car engines Remanufacturing
Zheng et al. (2019) Truck engines Remanufacturing
Kwak and Kim (2016) Alternator Remanufacturing
Warsen et al. (2011) Transmission Remanufacturing
Peters (2016) Paper folding machine Remanufacturing
Diener and Tillman (2015) Bearing (industrial use) Remanufacturing
Biswas and Rosano (2011) Compressor Remanufacturing
Cusenza et al. (2019) EV batteries Remanufacturing
Goldey et al. (2010) Telecommunication equipment Remanufacturing
Du et al. (2012) Machine tools Remanufacturing
Lishan et al. (2018) Loading machines Remanufacturing
Xiong et al. (2020) Electric vehicle battery Remanufacturing
Bobba et al. (2018) Electric vehicle battery Repurpose
Gutowski et al. (2011) Furniture (desk, chair) Reuse
Gutowski et al. (2011) Textile (T-shirt, blouse) Reuse
Gutowski et al. (2011) Appliances (dishwasher,
refrigerator, washing machine)
Remanufacturing
Gutowski et al. (2011) Truck tire (3 times) Retread
Gutowski et al. (2011) Computers (desktop control unit, 2
laptops, 3 monitors)
Reuse
Gutowski et al. (2011) Toner cartridge Refill
Gutowski et al. (2011) Electric motors (6 times) Rewind
Gutowski et al. (2011) Engines (2 times) Remanufacturing
Journal Pre-proof
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Andre et al. (2019) Laptop Reuse
Wang et al. (2017) Video game consoles Remanufacturing
Latham (2016) Vehicle Remanufacturing
Kim et al. (2003) Automobile Lifetime extension
Iraldo et al. (2017) Refrigerator/freezer Lifetime extension
Iraldo et al. (2017) Electric oven Lifetime extension
De Kleine et al. (2011) Residential central air conditioners Lifetime extension
Kim et al. (2006) Refrigerator Replacement
Ardente and Mathieux (2014) Washing machine lifetime extension
Kwak (2016) Cell phones Repair
Kwak (2016) Washing machines Repair
Intlekofer et al. (2010) Computers Lifetime extension
Intlekofer et al. (2010) Appliances (washers, dishwashers) Lifetime extension
Tasaki et al. (2013) TVs Lifetime extension
Tasaki et al. (2013) Air conditioning Lifetime extension
Tasaki et al. (2013) Refrigerator Lifetime extension
Cheung et al. (2018) LCD projector Remanufacturing
Ardente et al. (2018) Server Remanufacturing
Bakker et al. (2014) Refrigerators Lifetime extension
Bakker et al. (2014) Laptops Lifetime extension
Perez-Belis et al. (2017) Vacuum cleaner Lifetime extension
Bobba et al. (2016) Vacuum cleaner Lifetime extension
Lonca et al. (2018) Truck tires Retread, regroove
Richter et al. (2019) LED lamps Lifetime extension
Raz et al. (2017) Mobile phones Remanufacturing
Esenduran et al. (2016) Refrigerator Remanufacturing
Esenduran et al. (2016) LCD monitor Remanufacturing
Esenduran et al. (2016) Cell phone Remanufacturing
Liu et al. (2017) Refrigerators Remanufacturing
Thomas (2011) Books Reuse
Farrant et al. (2010) Clothing Reuse
Makov and Font Vivanco
(2018)
Smart phones Reuse
Kerr and Ryan (2001) Copier Remanufacturing
Kwak and Kim (2016) Desktop PC Remanufacturing
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Sabbaghi and Behdad (2017) Laptop Lifetime extension
Krystofik et al. (2017) Office furniture Remanufacturing
Tornese et al. (2018) Pallets Reuse
Tua et al. (2019) Crates Reuse
Bech et al. (2019) T-shirt Reuse and
Refurbishment
Kaddoura et al. (2019) Event tent and flag Refurbishment
Kaddoura et al. (2019) Recycling bin and storage locker Repair
Kaddoura et al. (2019) Waste collection inlet Repair
Hoffmann et al. (2020) Diapers Reuse
Lindahl et al. (2014) Core plugs, building cleaning, soil
compactor
Product Service
System
1
2
3
Journal Pre-proof
Declaration of interests
The authors declare that they have no known competing financial interests or personal relationships
that could have appeared to influence the work reported in this paper.
The authors declare the following financial interests/personal relationships which may be considered
as potential competing interests:
Journal Pre-proof
... The same logic is applied to reuse or repair, Niero et al. (2021) exemplify this with the consumers' adoption of reuse of shampoo bottles dependence on the proximity of a store to refill it. van Loon et al. (2021) argue that if the product does not require energy use during use, the reuse and remanufacturing strategy will have a positive impact. On the other hand, if the product consumes energy during use, replacing it with new ones can avoid the negative effects of old and polluting products, such as older refrigerator models containing GHG. ...
... In the clothing market, for example, primary production is not replaced by the second-hand market, on the contrary, the consumer buys these reused clothes in addition to others. These clothes are cheaper, which increases the consumer's purchasing power (van Loon et al., 2021). ...
... Dace et al. (2014) point out that a combination of strategies should be considered to really cause mitigation of RE, stating that multiple strategies can change consumer behavior like a single policy cannot. van Loon et al. (2021) corroborate that the environmental impact depends on consumer behavior, so one single strategy does not fit all groups of consumers. A multitude of circular options interacting with each other and promoted by various actors have more chances to mitigate RE (Ghisellini et al., 2019). ...
Article
Full-text available
Circular economy (CE) is an umbrella concept for closing material loops towards enhanced environmental performance. Despite the recognized benefits of CE, the intended outcomes are not always achieved due to the occurrence of rebound effects. The lack of consideration of potential rebound effects triggered by CE is delaying the achievement of CE's full potential. This paper aims to further evolve the concept and mechanisms of circular rebound effects by means of a systematic literature review. In this context, this paper proposes a conceptual framework which brings together the main characteristics and mechanisms (incl. the initiating, developer, and mitigating mechanisms) of a rebound effect in the CE context. The four major lessons learned from research on the circular rebound effect were discussed, including its contextual dependencies, the need for new forms of governance, and how direct effects can overshadow the indirect effects of circularity, indicating a need for early-detection instruments. In addition to proposing six avenues of future research, the research provides clarification and a basis for integrating rebound effect concepts into the CE practice, with important implications for a successful CE transition.
... Following increased interest in sustainable business and circular economy, there has been numerous calls for methods that can analyse the environmental performance of business models (e.g., Das et al., 2022;De Giacomo and Bleischwitz, 2020;van Loon et al., 2021) and that can guide business decisions towards the decoupling of economic activity from environmental impact (e.g., Harris et al., 2021;Kjaer et al., 2019;Urbinati et al., 2017). ...
... Many different types of sustainable business models have been proposed, but there is limited empirical support from environmental assessments as to whether their environmental performance is better and when these lead to decoupling (Kjaer et al., 2019;Pieroni et al., 2019;Zink and Geyer, 2017). Hence, there is a need for a systematic methodology for assessing the environmental consequences of business models and the different ways these create and capture value (Bocken et al., 2016;Harris et al., 2021;Kravchenko et al., 2019;van Loon et al., 2021). ...
... So far, the many tools that build on the business model canvas, such as those by Lewandowski (2016), Lüdeke-Freund et al. (2018) and Daou et al. (2020), can be useful to identify and/or design different features of a new business model. However, they are not capable of quantitative environmental assessment, and many have called for methods that can quantitatively measure the environmental performance of business models (e.g., Das et al., 2022;De Giacomo and Bleischwitz, 2020;Harris et al., 2021;Kjaer et al., 2019;van Loon et al., 2021). Such a quantitative assessment is possible with BM-LCA and shown in the present paper, albeit for a simple case. ...
Article
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This paper introduces business model life cycle assessment (BM-LCA), a new method for quantifying the environmental impacts of business models. Such a method is needed to guide business decisions towards decoupling economic activity from environmental impact. BM-LCA takes the business model itself as the unit of analysis and its economic performance as the basis of comparison. It can be applied to any type of business model involving material or resource use. In BM-LCA, monetary flows are coupled to material and energy flows. The methodology expands on conventional life cycle assessment (LCA) by elaborating the goal and scope definition and dividing it into two phases. The first descriptive phase details the business models to be compared. It includes a mapping of product chain actors and identifying business operations and transactions related to the product. The second coupling phase defines a profit-based functional unit and sets up the coupling equations expressing the economic relations to the product. Thereafter, conventional LCA procedures are followed to assess environmental impacts. The key innovation on LCA methodology is the development of a functional unit that captures the economic performance of a business model and links it to a product system. BM-LCA provides thus an important link between LCA and business competitive advantage.
... Moreover, the concept introduces value-added services [64], which brings long-term positive outcomes to financial performance [65]. Thus, this concept emerges as a solution to improve this usage in business activities [6,66]. Sustainable performance, incidentally, concerns this matter in that it balances the three facets: economic, environmental, and social performance; hence, it is proposed that: Hypothesis 2 (H2). ...
Article
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The integrated correlations of ethical leadership, environmental innovation, sustainable performance, and entrepreneurial bricolage were examined using the upper echelons and effectuation theories. The research utilised data from 223 manufacturing firms in north-eastern China, which indicated a 74.33 per cent response rate. The partial least square structural equation modelling (PLS-SEM) analysis exposed the significant positive impact of ethical leadership on environmental innovation and of the latter on sustainable performance. Furthermore, the current findings support the significant indirect effect of ethical leadership on sustainable performance through environmental innovation. The empirical results suggest an amplified impact of ethical leadership on environmental innovation, suggesting increasing bricolage values. Accordingly, the implications and limitations of the present study are elucidated in the final section of this article.
... It can be noted that for each single "end", just listed, there are corresponding impact categories usually evaluated in any LCA, including the Product Environmental Footprint (Zampori & Pant, 2019). LCA is also identified to be the approach of choice to evaluate the environmental sustainability of measures seeking to reduce consumption of materials and production of waste, i.e., the goal of CE, while also noting shortcomings (Peña et al., 2021;van Loon et al., 2021). ...
Technical Report
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The deliverable presents a critical evaluation of existing approaches addressing material criticality and circularity. These topics are dealt with in separate parts. PART 1: Material criticality Key ongoing transitions towards a more digital and sustainable future rely extensively on technologies that require critical metals and minerals for their production. These are called “critical raw materials” (CRMs) because of their strategic importance and supply-associated risks (be it for resource availability, geopolitical reasons or other issues). Therefore, several jurisdictions have developed strategies targeting to secure the supply of their economies with these critical raw materials (the EU and USA most notably). As an input and application of such strategies, methods for material criticality assessment are crucial and a substantial number of methods with varying scopes and indicators has been developed over the past 15 years. For the purpose of this deliverable, CRMs are defined according to European Commission (2017b) as “raw materials of high importance to the economy of the EU and whose supply is associated with high risk”. As a contribution to the overall objective of the ORIENTING project, i.e., to establish an operational Life Cycle Sustainability Assessment (LCSA) framework for products (including materials), a review and evaluation of methods for criticality assessments in terms of supply risks is carried out in this report. This also includes a closer look at the relationship between critical raw material assessments and assessment methods within other sustainability pillars, especially related to environmental life cycle assessment (LCA), but also to circularity (as 2nd part of this report). The evaluation of prioritised methods and tools for criticality assessment is carried out against a set of criteria developed in Task 1.1 in order to identify the most promising methods for use within a life cycle context and to identify aspects for further methodological development within the ORIENTING project. The criteria could assume values between A and E, with “A” as the best possible/realistic answer and “E” as the worst one. The option of not applicable (“N/A”) was also possible. In the end, the scores were aggregated into an overall score. A range of important issues have been identified and discussed. These concern the kind of input data needed and compatibility with LCI data (section 4.1), the question to which of the three pillars of sustainable development circularity belongs (4.2), the extent to which subjectivity (e.g. thresholds) is included in criticality assessments (4.3), dynamic aspects (i.e., inter-annual variability and prospective assessments; 4.4), the availability of data of a sufficient quality (4.5) and finally the link between criticality and circularity (4.6). Seven methods have been selected for evaluation against the T1.1 criteria: 1. National Research Council (NRC) (National Research Council, 2008), 2. European Commission’s Critical Raw Material methodology (here referred to as European Commission’s Criticality Assessment, EC-CA) (European Commission, 2017b, 2020c), 3. Yale methodology (Graedel et al., 2012), including extensions (Graedel, Harper, Nassar, & Reck, 2015; Ioannidou et al., 2017), 4. ESSENZ (Bach et al., 2016b), 5. British Geological Survey (Shaw, 2015), 6. Japan’s Resource Strategy (NEDO) (Hatayama & Tahara, 2015) and 7. GeoPolRisk (Cimprich et al., 2017, 2018; Gemechu et al., 2016). The evaluation of these methods against the T1.1 criteria (see chapter 5) suggests that all analysed criticality methods have a relatively high overall rating, i.e., between A and B, except for NRC scoring C+. According to the analysis discussed in section 6.2, EC-CA and GeoPolRisk appear as the two most promising approaches to consider in WP2, noting the issue of subjective thresholds. Temporal variability should be accounted for by facilitating regular updates. Making suggestions for prospective analyses appears to be out of the scope of the ORIENTING project. There can be links between criticality and the three pillars of sustainability (see section 4.2). As long as there is no double-counting issue with the environmental assessment (e.g. based on the PEF methodology (Zampori & Pant, 2019)), criticality can be classified as “non-environmental”. As far as the social and economic domains are concerned, the answer is not as clear cut. Indeed market (i.e., economic) and geopolitical (i.e., socio-political) factors contribute to overall supply risks. When following Sonderegger et al. (2020), criticality belongs to the economic pillar because “impaired product functions” and “additional costs of production” are the corresponding endpoints to be assessed. It needs to be emphasised that treating criticality as part of the economic dimension of sustainability will imply changes in the conceptualisation of LCSA as originally proposed by UNEP/SETAC (UNEP/SETAC LCIn, 2011) (further discussed in section 6.3). PART 2: Product-related circularity Striving for the political target of a Circular Economy (CE), as exemplified in the European Commission’s (EC) Circular Economy Action Plan 2.0 published in 2020, different circularity metrics have been developed that are used in a variety of contexts and at different levels. CE seeks to eliminate the concept of waste, that exists in the current linear economy, and minimise the dependence on virgin materials. At a macro level, CE is fundamental to achieve sustainable development, with a systemic change needed at an economic, organisational and product level. In the context of the ORIENTING project, focused on the assessment of products, CE and circularity are intended to promote the extended and/or cyclical use of products, as well as their parts and materials. However, a universally agreed definition of Circular Economy is lacking at present -which might be remedied through a new standard being produced within the ISO Technical Committee 323. As said, the focus of ORIENTING is on the circularity of products. In companies, ecodesign is used to “design in” strategies related to circularity that include materials reduction, durability, disassembly, refurbishment, recycling (see for example IEC 62430:2019). The concept of “material efficiency” is often used to refer to strategies aimed at reducing material input and generation of waste associated from products. CE strategies have the goal to promote the availability of more sustainable products on the market, which ultimately requires to assess their environmental, economic and social impacts. In this respect, ORIENTING will embed CE aspects in the overall analysis of environmental, social and economic impacts (LCA, sLCA and LCC). The work completed within ORIENTING may also make a useful contribution to the new Sustainable Product Initiative (SPI) of the European Commission. Against this background, Part 2 of this deliverable has the following objectives: identifying relevant approaches, concepts, methods and indicators related to circularity of products to be integrated into ORIENTING’s LCSA framework; conducting a critical evaluation of a selection of the most promising indicators for use in LCSA; providing recommendations for methodological developments that feed into WP2 of the ORIENTING project. These objectives are achieved through a combination of systematic literature review, expert interviews and the analysis of prioritized methods and tools based on pre-defined evaluation criteria. Considering the very prolific production of CE-related literature, the starting point was to identify the literature cited in or citing at least one of two recent review papers of high quality, i.e., Moraga et al. (2019) and Saidani et al. (2019). Further criteria were applied to reduce the number of approaches to analyse to a manageable number, notably product-level indicators which are not specific to one product and cover more than one CE strategy. Nine methods were identified that were analysed against the T1.1 criteria, as presented in section 8.3: 1. Product-Level Circularity Metric (PLCM, C-metric) (Linder et al., 2017, 2020), 2. Material Circularity Indicator (MCI) (EMF & Granta, 2019), 3. Longevity indicator (Franklin-Johnson et al., 2016), 4. Circular Footprint Formula (CFF) (Zampori & Pant, 2019), 5. Product Circularity Indicator (PCI) (Bracquené et al., 2020), 6. Circularity index Circ(T) (Pauliuk et al., 2017), 7. Value-based resource efficiency (VRE) method (Di Maio et al., 2017), 8. Sustainable Circular Index (SCI) (Azevedo et al., 2017), 9. In-use occupation ratio (UOR) and final retention in society (FRS) (Moraga et al., (2021). The T1.1 criteria could assume values between A and E, with “A” as the best possible/realistic answer and “E” as the worst one. The option of not applicable (“N/A”) was also possible. In the end, the scores were aggregated into an overall score. In parallel, interviews with 6 experts from European Environmental Agency (EEA), World Business Council for Sustainable Development (WBCSD) and the convenor of WG3 of ISO TC 323 have been conducted to identify current trends. The interviews suggest that three product-related circularity tools (two from Ellen MacArthur Foundation (EMF) and one from the WBCSD are mostly used by companies. There are indications that the EMF tools seem to be used by companies in the EMF network and the WBCSD tool is perhaps used more widely; although the precise usage is not in the public domain. All of them include a series of indicators and metrics, noting that the tools Circulytics by EMF and CTI2.0 by the WBCSD focus on companies, not products. Based on the considerations about functional units (see section 9.4), life cycle stages (7.2) and indicators (10), the ORIENTING LCSA framework could address the different CE strategies in the following way: • Through adapting the functional unit and proper definition of the reference flow, taking account of lifetime extensions of products through some CE strategies (e.g. through repair and refurbishment). For other CE strategies, other adjustments or approaches are needed (see next points). - Distinguishing life cycle stages according to relevant steps in a CE: in order to account for CE efforts made along the life cycle of a product and also considering potential social impacts during these stages, treating the product development/design stage and a stage comprising of maintenance, repair and refurbishment of the product separately is suggested rather than “hiding” them in the production or use stages respectively. - Introducing dedicated CE indicators: as suggested by some authors (Helander et al., 2019; Pauliuk, 2018), a set of indicators/metrics (in addition to environmental, social and economic indicators) could be considered to address measures for different products and materials at different life cycle stages. While the adaptation of the functional unit (including the reference flow) to explicitly specify the lifetime of a product and distinguishing further life cycle stages of relevance for CE measures is straightforward, establishing a balanced list of dedicated indicators is more challenging. The evaluation of selected circularity methods against the T1.1 criteria (chapter 10) suggests that they all score relatively high overall (i.e., between A and B). As discussed in section 11.2.2, the evaluation is somewhat inconclusive as to which CE method to prioritise for further analysis in WP2. When looking at the overall score and at the compatibility with LCSA, MCI, PCI, PLCM, the Longevity indicator, and UOR/FRS should deserve further consideration. Given its endorsement by the European Commission in the context of the “Product Environmental Footprint”, the CFF is expected to be used as part of the environmental LCA. Using constituents of the CFF to establish stand-alone CE indicators could be explored. From an operational point of view, Circ(T) and VRE can be excluded. While CE measures taken in the product system could also simply be described, evaluating CE measures in environmental, social and economic terms (or “absolute terms”) needs to be the measuring rod in the end. In terms of integration, there are two somewhat opposed arguments. First, CE measures are means not ends which calls for a treatment that is not on a par with the three pillars of sustainability. Second, in order to identify trade-offs with the latter, the CE indicator results need to be presented alongside with the sustainability indicators. Either way, an integration with any of the three dimensions environment, economic, social does not appear an option. In the end, the LCSA integration tool should allow sufficient flexibility to be fit for purpose to wide range of stakeholders having varying perspectives, needs and expectations.
... Integrating solar photovoltaics (PV) and other renewable energy sources into the circular economy (CE) is important for sustainable, rapid growth. Although definitions of CE vary, the implementation is materials recirculation reaching economy scale, leveraging actions including reduce, reuse, repair, remanufacture, and recycle (Kirchherr et al., 2017;van Loon et al., 2021). This integration requires proactive planning for circular disposition options and supply chains. ...
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Internal organisational factors have been identified as barriers to adopt circular economy (CE) practices in prior research. However, empirical evidence is limited to support this claim. Additionally, their impact on sustainable business performance, especially for the emerging economies and within the small and medium sized enterprises (SMEs) have not been studied adequately. This research bridges these knowledge gaps drawing on from CE, human resource management, innovation and sustainability literature to develop and validate a theoretical model that examines the relationships between organisational factors (leadership, innovation, culture, and skills) and their impact on adopting CE practices to enhance sustainable performance of SMEs. A survey was conducted among 205 SMEs’ employees in Vietnam, and responses were analysed using employing Structural Equation Modelling. Our findings reveal that organisational leadership will facilitate developing the culture and innovation capability to adopt CE practices through a ‘hub and spoke’ strategy for enhancing sustainable performance among the SMEs in Vietnam. In this vein, we recommend creating knowledge sharing strategies, collaborative and cooperative CE working groups within and between SMEs, and information systems capabilities to build sustainable business organisations.
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The Circular Economy (CE) concept is receiving increasing global attention and has captivated many disciplines, from sustainability through to business and economics. There is currently a strong drive by companies, academics and governments alike to implement the CE. Numerous “circularity indicators”have emerged that measure material flow or recirculated value of a system (e.g. product or nation). However, if its implementation is to improve environmental performance of society, the action must be based on scientific evidence and quantification or it may risk driving “circularity for circularity’s sake ”. This paper, therefore, aims to review the recent circular economy literature that focuses on assessing the environmental implications of circularity of products and services. To do this we divide the system levels into micro (product level), meso (industrial estate/symbiosis) and macro (national or city level). A scoping literature review explores the assessment methods and indicators at each level. The results suggest that few studies compare circularity indicators with environmental performance or link the circularity indicators between society levels (e.g. the micro and macro-levels). However, adequate tools exist at each level (e.g. life cycle assessment (LCA) at the micro-level and multi-regional input- output (MRIO) analysis at the macro-level) to provide the ability to adequately assess and track the CE performance if placed within a suitable framework. The challenge to connect the micro and macro-levels remains. This would help understand the link between changes at the micro-level at the macro-level, and the environmental consequences. At the meso-level, industrial symbiosis continues to grow in potential, but there is a need for further research on the assessment of its contribution to environmental improvement. In addition, there is limited understanding of the use phase. For example, national monitoring programmes do not have indicators on stocks of materials or the extent of the circular economy processes (such as the reuse economy, maintenance and spare parts) which already contribute to the CE. The societal needs/functions framework offers a promising meso-level link to bridge the micro and macro-levels for assessment, monitoring and setting thresholds.
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Brazil, an emerging economy with more than 208 million inhabitants, is currently one of the biggest consumers of disposable diapers worldwide, generating huge waste streams to sanitary landfills or dumps. This take-make-dispose system causes high material and fuel consumption and serious environmental impacts. The concept of the Circular Economy, promoting that material flows should be circular, material and energy efficiency should be maximized and residues, as far as possible, designed out, has continuously gained attention over the last decade. For a Circular Economy, technological innovation, new business models and changes in consumer behavior are needed. The present study compares the use of modern cloth diapers and disposable diapers via a screening Life Cycle Assessment, checking conventional and innovative circular business models for the application of modern cloth diapers, such as the leasing or pay-per-service models, while focusing on the regional context of Brazil. Results indicate that cloth diapers show generally a better environmental performance than disposable diapers, whose poor performance is mainly due to their end-of-life treatment in sanitary or unsanitary landfill, provoking high greenhouse gas emissions. For cloth diapers, the most advantageous product system consists in a diaper-as-service model at large scale, using efficient continuous batch washers for sanitizing the diapers. Diaper-as-service models at smaller scale in so-called on-premise laundries show poorer environmental performance, due to higher water and energy needs. Domestic laundering of diapers is a good alternative regarding its environmental performance, because of its low energy consumption. However, consumers accustomed with disposable diapers might be reluctant to engage with this additional domestic labor.
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Several restoring technologies are employed in engine remanufacturing, such as brush electroplating, arc spraying and laser cladding, which could improve the quality and performance of the remanufactured product and the efficiency of remanufacturing processes. The primary objective of the present study is to analyze the environmental benefits of remanufacturing employing advanced restoring technologies (Scenario 3) in comparison to newly manufacturing (Scenario 1) and remanufacturing without using advanced restoring technologies (Scenario 2) based on Life Cycle Assessment (LCA) methodology. Resource and energy consumptions of each manufacturing and remanufacturing processes were collected along the production line and then the results of seven selected environmental impact categories are calculated. The results show that engine remanufacturing with advanced restoring technologies will achieve large environmental benefits. By using advanced restoring technologies, engine remanufacturing could be able to restore more damaged components and reduce the environmental impacts through reduced consumption of raw materials production and manufacturing process of production replacement parts.
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China has implemented broad strategies aimed at achieving a circular economy, among which are providing subsidies for the remanufacture industry and setting a target of 15% increase in energy efficiency in industrial production across sectors. Here, we examine the environmental implications of these policies in the context of engine remanufacture, using an environmental computable general equilibrium (CGE) model. Results indicate that the subsidy policy and energy efficiency improvement can contribute to both economic growth and emission reductions, but the subsidy policy is estimated to have far greater impacts. Implementing both can reinforce each other, generating higher economic and environmental benefits than the sum of each occurring alone. Another major finding from our model is that an additional remanufactured engine can only displace 0.42 (90% confidence interval from 0.32 to 0.47) of a new engine (comprised of new parts), mainly because lowered prices for remanufacture engines lead to greater consumption. This ratio is much lower than the 1:1 perfect displacement commonly assumed in life cycle assessment (LCA) studies. Overall, our study suggests that subsidizing engine remanufacture in China can help promote the industry, improve overall economic welfare, and contribute to environmental targets. Our study also contributes to estimating more realistic product displacement ratios in LCA.