Accelerating The Transition To A Functional Circular Economy By Mainstreaming Remanufacturing

Radically transforming global value chains is critical to succeeding in our collective ambition of co-creating a sustainable world. This ambition is exemplified in the G20’s vision of Designing a Circular Economy World through the establishment of the Resource Efficiency and Circular Economy Industry Coalition (RECEIC).! The RECEIC highlights six Rs of circularity – redesign, reduce, reuse, remanufacture, repair, and recycle. Remanufacturing is an industrial process that restores end-of-life (EOL) goods to original working condition or better.? It involves the collection, disassembly, cleaning, inspection, rebuilding/replacing, reassembly, and testing of goods such as automotive and aerospace components, medical devices and electronics, before they re-enter the market. Remanufactured goods are indistinguishable from new goods in terms of quality, performance, appearance, functionality and warranty,® and in some cases can outperform ! “Resource Efficiency and Circular Economy Industry Coalition: Presidency Document”, India’s G20 Presidency, last modified July 2023, https://www.g20.in/content/dam/gtwenty/gtwenty new/document/G20 ECSWG- Resource Efficiency and%20 Circular Economy Industry Coalition.pdf. 2 “Remanufactured Goods: An Overview of the U.S. and Global Industries, Markets, and Trade”, U.S. International Trade Commission, accessed March 31, 2024, https://www.usitc.gov/publications/industry _econ_analysis 332/2012/remanufactured g oods_overview us and global.htm. 3 “Making India a Global Leader in Remanufacturing”, Recreate India Research Foundation, last modified October 2023, https://recreateindia.org/publications/makingindiaagloballeader/. new goods. It is performed across borders and sectors by some of the world’s most respected companies. Yet, its share in global production is estimated to be 2 to 3 percent. The United Nations (UN) International Resource Panel (IRP) notes that compared to linear production, remanufacturing can*: Reduce new material requirements by 80 to 98 percent Lead to a cut of about 90 percent in production waste Avoid 79 to 99 percent of embodied material, energy and emissions Avoid 57 to 87 percent of process energy and emissions Create more jobs, cost less and open new markets To accelerate the transition to a strong and functional circular economy, this policy brief recommends G20 members take steps to: 1. Agree on common taxonomy for remanufacturing to facilitate cooperation for a) accelerated adoption of remanufacturing practices and b) international trade 2. Mainstream remanufacturing so that it becomes a normal aspect of any product’s lifecycle 3. Close the financing gap by further aligning the realms of finance and circular economy 4 “Re-defining Value – The Manufacturing Revolution”, United Nations Environment Programme (UNEP) International Resource Panel, last modified February 09, 2022, https://www.resourcepanel.org/reports/re-defining-value-manufacturing-revolution.