Remanufacturing: Links to Sustainability Matt Bogoshian Senior Policy Counsel Office of Chemical Safety and Pollution Prevention U.S. Environmental Protection Agency 1

Background - Global Throughout history, crises have created conditions that led to the conservation of, and reevaluation of how we use, natural resources World population is expected to rise from 7 billion to 9 billion by Population growth in emerging nations and urban areas will lead to unsustainable increase in consumption of natural resources; e.g., due to world demand for copper, amount of copper mined over next 25 years may equal amount of mined to date (Nasr, 2012). In order to adapt to these conditions, we expect an increased need to conserve, e.g., greater use of remanufacturing practices. 2

Background - U.S. Remanufacturing In U.S., remanufacturing dates back to Great Depression and World War II. Historically, main drivers were economics, resource shortages, and available manufacturing capacity. Based on literature review, approximately 80,000 companies remanufacture products, employing about 500,000 workers; about 25 workers on average per company. Now the main drivers are: a) quality, because remanufactured products are at least as good as new products; b) cost, because remanufactured products are less expensive to make and purchase; and c) health, for people and planet because remanufacturing products require less energy and generate less waste. Examples of sectors involved in remanufacturing include auto parts, cellular telephones, computers, construction equipment, and medical equipment. 3

Sustainability Pillars Sustainability has three pillars: – Economy; – Environment; – Society.* Remanufacturing has a place within each pillar, e.g., – Lower cost/Increased profit; – Resource conservation/Less energy and pollution/Better health for people/planet; – Skilled jobs/People thrive. * Pillars are linked to Profit, Planet, People. 4

Main Advantages of Remanufacturing* Economy: Costs less to make and buy remanufactured product (costs about 20-60% less) than equivalent manufactured product; Employs skilled work force. Environment: – Saves about 85-95% of energy needed to manufacture new product. – Worldwide, conserves equivalent of 69 million barrels of crude oil annually, reducing CO2 releases by 28 million tons. – Conserves natural resources -- approximately 14 million tons annually -- and reduces landfill disposal by about 75% compared to manufacturing new product. – Upgraded products work more efficiently than previous new product. Society: Remanufacturing requires skilled work force. Performance: Works as well or better than previous product. Responsibility: Companies are increasingly being held accountable by stakeholders for environmental impacts from their supply chains and products during their life cycles. * Estimates based on review of the literature. 5

Examples Caterpillar has a remanufacturing division because reman is good for customers, business, and environment: – Returned over 2 million “cores” in 2010; – Remanufactured or recycled 134 million lbs material per year; – Recycle 200,000 pounds cardboard, 3.4 million pounds wood annually; – Preserve about 85% of original energy “value add”; – Approaching “zero landfill” status. Xerox - about 95% of its equipment sold through direct channels in U.S. is returned for end-of-life disposition: – Diverted 5.4 metric million tons from landfill disposal in 2009 through remanufacture and parts reuse. 6

Next Steps to Consider Raise awareness -- Promote remanufactured products as new products; Motor & Equipment Remanufacturers Association’s (MERA’s) Manufactured Again™ campaign sounds promising. Evaluate impacts -- Compare life-cycle impacts of remanufacturing and manufacturing new products for key product lines; Populate LCA data bases. Make connections -- Identify links to product take-back and stewardship efforts. Align with standard-setting processes and tools -- Assign industry classification code; Improve industry data collection; Incorporate remanufacturing in product design, life cycle, etc. Network into new markets -- Increase demand through encouraging government agencies to purchase remanufactured products; Reduce trade barriers. 7

Thank you! Questions? Contact information: Matt Bogoshian Senior Policy Counsel Office of Chemical Safety and Pollution Prevention U.S. Environmental Protection Agency 8