Circular Economy Business Models for Electronics

July 14, 2021 | Guidance, Insights,

Circular business models allow companies to create value through resource efficiency and extending the lifespan of products and parts. In contrast to a linear economy, where products are created, used, and then form waste, electronics in a circular economy are kept in use for as long as possible from first to subsequent users until finally devices can be refurbished, reused or remanufactured. Technologies and product design play an important part in this.

The move from a linear to a circular business model for the electronics industry can be achieved through several steps:

  • Closing loops: How might we redirect ‘waste’ materials to increase their value through other applications?
  • Narrowing loops: How can we reduce the use of resources to achieve the same or better results?
  • Slowing loops: How can we ensure resources are kept in productive, valuable use for longer?
  • Cleaning loops: How can we reduce the social or environmental costs associated with processes and materials?

These steps all have benefits for keeping resources in use and extracting maximum value from them.

Under the EU Circular Economy Action Plan, there are several tactics outlined to increase circularity throughout electronics products’ lifecycle, including the Circular Electronics Initiative.

Perceptions of Electronic Waste are Changing

Circular business models are becoming increasingly popular as consumers consider both the value and the environmental impact of the products they are purchasing. The models are also becoming more mainstream and recognised within the technology and electronics sector, for example in extended producer responsibility schemes and reverse logistics, where used products are collected, taken back and recycled by manufacturers, meaning used products can be upcycled, resold or recycled into new products or materials.

Yet, there are more new untapped models and resources that can provide further benefits.

Pile of waste electrical circuit boards

What benefits can circular business models offer the electronics sector?

Utilised correctly, the circular economy offers the following benefits to the electronics sector:

  • The improved handling and control of used and end-of-life devices and the valuable materials they contain.
  • Alignment to strategic or sustainable development objectives, helping to tackle issues such as resource scarcity, extraction, pollution, and labour rights.
  • The ability to contribute to Net Zero and carbon emissions reductions goals, utilising reuse, repair, and recycling to enable carbon savings. For example, Microsoft’s work with Closed Loop Partners tmeet its zero-waste by 2030 goal through reuse, repurposing and recycling.
  • Increasing commercial value for symbiosis models, where the components and products in an organisation’s waste are reused or remanufactured into original or new devices, such as Lime, who recycle used scooters into consumer electronics.
Circular Electronics Models

Examples of circular electronics business models

To create a circular business model, organisations must coordinate value chains to improve resource efficiency by extending the useful life of products, parts, and materials. In electronics value chains, this can involve reuse, share, and repair, collection and reverse logistics, and sorting and reprocessing of materials.

  • Electronics as a service, where customers purchase a particular use or service rather than the electronic equipment or product itself. For example, Homie offers pay-per-use washing machines, where prices are calculated depending on usage, and including maintenance.
  • Leasing electronic devices instead of ownership. This provides benefits to consumers including accessibility of more advanced and expensive technology, flexibility for purchasing and needs, while allowing a more circular approach to technology re-use. For example, Grover, a Berlin-based start-up, offers a subscription model for consumer electronics such as computers, consoles, and scooters.
  • Intelligent product design: Designing products to prolong the use phase, such as for disassembly and repairability and modular design. For example, Fairphone’s modular design enables easy repair, replacement, and upgrade of individual parts which are readily available.
  • Reuse: Returns, refurbishment, and re-sale offer huge potential for maximising resource efficiency and the use of products, though widescale adoption in the electronics sector is still relatively small. The sale of used consumer devices is currently largely informal, through online platforms like eBay, however there is an opportunity here for companies to upscale and increase consumer confidence and credibility, like when buying a used car from a brand dealership. For example, networks such as O2 allow customers to trade in old phones which are then refurbished and sold on with a 12-month warranty.

How Anthesis can support you to maximise opportunities for circularity

Anthesis has deep expertise in designing and implementing circular economy solutions and consumer electronics across the supply chain. Our team can support you to understand the opportunities for circular business models and design circular economy solutions that enable the optimal use of commodities and resources in line with your sustainability goals.

We can help you to:

Enable new or improved circular business opportunities.
Understand the value chain interactions and how best to maximise a commodity and its environmental performance, for example, through design for repairability.
Align circularity objectives with Net Zero and carbon reduction targets.
Understand industry best practice and establish partnerships with businesses who can release the value of end-of-life devices. The need to utilise this value in electronic waste has already been recognised in UN report on lost opportunity of material value in e-waste $10bn.
Manage end-of-life recovery as a final option to increase value and lifespan of products and materials.
Conduct market analysis, benchmarking, regulatory landscape, stakeholder engagement, material flow analysis, and financial modelling.

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