Circularity Development Program, Blog 4: Product Life Extension

Circularity Development Program's fourth sprint focused on extending the lifetime of products and components. In the latest blog, Swegon’s Mirko Sauvan shares insights on reusing, refurbishing, and other tactics in the circular economy context.

Exploring  Circular Practices for Product Life Extension

Reusing and refurbishing products present a substantial, sustainable business potential in the near and medium-term. These approaches are not new, but a dedicated focus will benefit the planet and offer new economic opportunities. During the workshop, companies like Swegon, Multiconsult, Schneider Electric, Rebel Lights, RISE, Stena Circular Consulting, and Palats, have shared their expertise and examples related to reuse, refurbishment, circular design, merging marketplaces, and legal frameworks. 

Implementing RE-tactics 

Implementing RE-tactics is a transformative process in the pursuit of circularity, aiming to eliminate the concept of waste. The most familiar RE-Tactics are the following:

REuse: Using discarded products in good condition for their original function.
REpair: Repairing and maintaining defective products to restore their original function.
REfurbish: Restoring old products and bringing them up to date.
REmanufacture: Incorporating parts of discarded products into new ones with the same function.
REpurpose: Using parts of discarded products in new ones with different functions.

Despite of those existing tactics, current circular practices in the building industry are primarily focusing on activities like maintenance, repair, and spare parts sales. Such practices are viewed as necessary inconveniences or legal obligations rather than well-thought-out business models suitable for large-scale implementation. Factors contributing to this perception include legislative uncertainties, practical obstacles, limited customer demand, and technical and economic complexities associated with certain RE-tactics. Slightly more mature in this respect are providers of building materials and components compared to providers of technical building installations.

The economic system historically optimized for a linear approach (make, use, waste) is shifting towards a circular economy as environmental impact considerations affect companies' financial performance. Reusing and refurbishing existing products are taking a leading role among program participants, especially for high-quality and complex products. Nonetheless, product development needs to incorporate more design for disassembly and other circular design strategies for long-term benefits and optimization.

Reusing and refurbishing existing products are taking a leading role

The case study by Swegon and Multiconsult showcasing the reuse of a GOLD air handling unit in a Norwegian project identified critical success factors such as high engagement and commitment from all involved parties. Bringing together the necessary expertise helped overcoming technical and logistical issues. Even the other case studies highlighted cooperation across the value chain and collectively, all participants emphasized the importance of balancing economic, environmental, and social sustainability in projects with RE tactics.

Circular Business Model Appeal

Circular business models are gaining popularity across industries due to the increasing recognition of the business value of sustainability. By incorporating for instance reuse and refurbishment into market offerings and operations, businesses can significantly reduce their own and their customers environmental impact. As a growing number of environmentally conscious consumers are actively seeking solutions to minimize their environmental impact, new revenue streams can be created through product resale or rental services, while also lessening the need for raw materials and associated energy consumption. Offering reuse or refurbished products at competitive prices, or providing rental, leasing, or subscription options, can potentially attract new customer bases. Adopting circular business models enhances a company's brand reputation by demonstrating a commitment to sustainability and responsible consumption.

New revenue streams can be created through product resale or rental services, while also lessening the need for raw materials and associated energy consumption

Driven by the promising opportunities and its strategic focus, Swegon is extending its traditional offers with the "RE:3 concept," consisting of three initiatives: RE:use, RE:vitalise, and RE:duce. The RE:use initiative involves a take-back system for reselling modernized products, RE:vitalise includes onsite updates for product life extension, and RE:duce focuses on reducing the carbon footprint through alternative materials and design adaptations. Swegon's initiatives aim to support customers in addressing environmental challenges related to embodied carbon emissions, providing alternatives to traditional solutions and new solutions for lowering the embodied carbon of indoor climate systems.

Policies Promoting Circular Practices

The program primarily focuses on Europe due to limited global support for circular economy and RE tactics. The European Union spearheads this effort with the European Green Deal and Circular Economy Action Plan, striving for sustainable growth, zero greenhouse gas emissions, and waste prevention. Key initiatives include the Corporate Sustainability Reporting Directive (CSRD), EU Taxonomy for market transparency, and the proposed Ecodesign for Sustainable Products Regulation (ESPR) to enhance product circularity and environmental performance for European consumers. Even the revision to Construction Products Regulation (CPR) aims to include renewed and reused products, aligning construction materials and products with circular economy principles. It should encourage product longevity, ease of repair, and recyclability at the end of their life cycle and fostering increased competition in the circular product market. The Right to Repair Directive aims to reduce electronic waste by obligating manufacturers to provide consumers and repair shops with certain product parts for a reasonable duration after purchase. These legislative initiatives will result increased competition in the circular product market, give a boost in the availability of "second life" and longer-lasting products, and a focus on product life extension.

Challenges and opportunities in transitioning to circular practice 

Both companies and customers face challenges in transitioning to circular offerings and consumption. Limited knowledge and mutual understanding between companies and customers create a chicken-and-egg dilemma. Providing information and communicating the benefits of circular practices are however essential to address the challenges. Swegon highlights potential benefits such as reduced investment costs, minimized disruption, enhanced energy efficiency, and lower environmental impacts through product reuse and refurbishment. Digital tools play a pivotal role in a more circular economy by detecting and predicting maintenance, repair, optimization, and update needs. In that regard, lack of connectivity of older products are gradually closing due to increasing digitalization. Collaboration throughout the value chain is further crucial for circular economy success and poses special challenges in a fragmented and competitive building industry where across company border partnerships are often unfamiliar.

The shift to a circular economy also triggers innovation in platforms like CCbuild and Palats as they connect buyers and sellers for reselling and reusing of products which is still a niche marketplace. Such platforms play a crucial role in matching existing products with new users which is a key element of many RE-tactics. These second-hand markets will contribute significantly to reducing waste and extending the life of products.

Implementing circular economy strategies such as reuse and refurbishment for product life extension enable a shift towards a restorative and regenerative approach of doing business. Adopting a circular approach is not only an ethical decision, but also a savvy business strategy. Companies like Swegon with the launch of its RE:3 concept can align with consumer demands for more sustainable options while capitalizing on economic opportunities within the framework of a circular economy by concentrating on waste elimination and efficiency enhancement. The rise of dedicated platforms,
start-ups, and wider commercial offers of established businesses for reselling and reusing will accelerate the transition.

– Mirko Sauvan, Sustainability Manager, Swegon

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