A report by manufacturing consultancy HSSMI has found that moving from a linear supply chain to a closed loop supply chain could deliver the UK automotive manufacturing industry cost efficiencies of over 16 million tonnes of CO2 equivalent per annum by 2025.
The report titled ‘Closing the Loop to Net Zero: Circular Economy Examples from Automotive, Aerospace and Shipping’ is a rallying cry from HSSMI for manufacturers to embrace the circular economy.
Closed loop supply chains are when manufacturers adopt refurbish, recycle and repair strategies for end-of-life vehicles, which displaces the energy-intensive processes involved in raw material extraction and processing.
The London-based consultancy HSSMI says that based on a blend of ICE and BEV vehicles, using a mixture of remanufacture (40%), recycling (55%) and unavoidable disposal (5%), and with sales forecasts of 575,000 BEVs and 1,225,000 ICEs in the UK, then the potential emissions savings could be as high as 16 million tonnes per year.
Another key finding from the report shows that up to 60% of a BEVs carbon footprint can be generated before it leaves the factory.
HSSMI also forecasts that if the automotive industry sticks with the current linear supply chain model, then emissions from materials production could hit 60% of total automotive emissions by 2040.
If manufacturers are to “survive” and “thrive” in the future, HSSMI says they must embrace the circular economy by finding ways to recycle EV batteries.
There are currently manufactures looking at a range of second, third and even fourth life opportunities, but most are yet to put fully commercial solutions in place.
Savina Venkova, HSSMI circular economy manager, says: “Strategies, such as reuse, remanufacturing and recycling negate the need for constant resupply of new raw materials by redirecting end of life products from landfill back into the supply chain, where their components and materials can be recovered and repurposed as feedstock for equivalent new products.”
Global leaders at the COP26 UN Summit on climate change in November in Glasgow stressed the need to adopt a circular economy solution for EVs if we are to achieve net zero by 2030.
David Stewart, engineering director for research & innovation at HSSMI, said: “The truth is that the energy transition will only solve half the climate problem. It's like we have been only reading half the book, like we've been only watching half the movie. So, what completes the picture? Transforming how industry uses materials and how we manage land. That is, transitioning to a circular economy.”