ACHIEVING CIRCULAR ECONOMY AND SUSTAINABILITY THROUGH GLOBAL BEST PRACTICES IN ELECTRONICS SECTOR

Article

INTRODUCTION
Global resource consumption will outpace Earth’s replenishment capacity by 2050, with materials like biomass, fossil fuels, metals, and minerals set to double by 2060. This surge in consumption is also projected to increase waste generation by 70% by 2050, contributing significantly to pollution and 40% of global greenhouse gas emissions. For instance, producing one tonne of laptops can emit up to 10 tonnes of CO2, emphasizing the importance of resource-efficient production and recycled inputs.
The United Nations introduced Sustainable Development Goals (SDGs) in 2015 to address these challenges. India has also committed to achieve SDGs like Responsible Consumption and Production, Sustainable Cities and Communities, and Industry, Innovation and Infrastructure align with the principles of the circular economy (CE). Many electronics manufacturers are already aligning their strategies with specific SDGs.
Transitioning to a CE can reduce reliance on virgin materials and boost resource productivity. As India strives for self-reliance (Atmanirbhar Bharat), the sustainable growth models are imperative to benefit citizen, the environment, and the economy. This requires increased investment in skills, sectors, products, business models, digitalization, and technologies that promote long-term prosperity and environmental health.
CE realization in the electronics sector necessitates in creating a system where electronic products are designed, used, and recycled in a way that minimizes waste and maximizes resource efficiency.  The CE principle in e-waste management also demands green design, sustainable manufacturing, circular business models in order to reduce e-waste generation, resource recovery, and digital tools for transparency and stakeholder engagement. These innovative approaches can help shift towards a more sustainable and resource-efficient future1.
India faces a significant e-waste challenge, generating 4.17 million tonnes in 2022 ranking third globally. However, the collection and recycling of e-waste in India remain insufficient. A circular economy approach demands extended life of products till their usability, thereafter, responsible recycling using global best practices to recover precious materials, once further use is impossible.  India should also adopt one of the global best practices, like R2 Standards in refurbishing and recycling ecosystem. R2 standard offers a key solution for environmentally friendly electronics recycling. This article makes an attempt to examine the core features and benefits of this standard safety system, steps for obtaining R2 certification and reasons to align with certified electronics recyclers. As the problem of electronic waste grows, the R2 certification will be imperative to measures the outcome of the achieving CE principles in EEE sector2.

Sustainability in Electronics

The CE principle requires following four broad measures to ensure the sustainability in electronics: 

  • Design for Longevity: Products should be designed to last longer, with modular components that can easily be repaired or upgraded. This reduces the need for frequent replacements.
  • Material Efficiency: Use materials that are less harmful to the environment and can be easily recycled or reused. This includes minimizing the use of rare or hazardous materials.
  • Energy Efficiency: Improve the energy efficiency of devices during their use and consider the energy consumption of the entire product lifecycle, including manufacturing, transportation, and disposal.
  • Sustainable Supply Chain: Business process should stress with better coordination with the suppliers who adhere to sustainable practices and ensure that raw materials are sourced responsibly.



INDIAN SCENARIO 
India regulates e-waste through the E-Waste (Management) Rules, 2022, since 1st April 2023. These rules cover 106 products and their components, recognizing stakeholders like manufacturers, producers, refurbishers, and recyclers. A recycling target-based Extended Producer Responsibility (EPR) system has been introduced, showing promise in formalizing waste collection and boosting e-waste recycling. Initially, extraction of four metals (steel/iron, aluminium, copper, gold) have been considered for assessing the merits of EPR implementation, wherein EPR credits should be purchased by the producers from the authorised refurbishes and recyclers, who will generate those credits by proper refurbishing or recycling the products handed over by the producers. Environmental compensation is also been enforced on the stakeholders for violating the rules3. 
India has already generated 4.17Million MT per annum of e-waste in 2022, as per international report2. The secondary raw material available in the said volume of e-waste composes of 2.09 million MT of ferrous metals (~50%), 0.87 million MT of plastics (~21%), 0.67 million MT of other hazardous materials (~16%) and 0.54 million MT of non-ferrous metals (~13%), shown in Fig. 1. This could be used for economic development of the country.

Under the present E-Waste (Management) Rules, 2022, Government of India has prioritised to track four important metals (steel/iron, aluminium, copper, gold) as secondary raw materials recovery through EPR implementation. After one year of EPR compliance, CPCB portal has been showing accumulation of the metals, as uploaded by the recyclers, which is very encouraging for the economy. However, we need to validate these claims through third party audits. India should learn the global best practices on entire ecosystem of recycling sector. This would be imperative for protecting health of the operators and the environment apart from a substantial business opportunity and employment generation. 

Another important sector, India should can concerted efforts to upgrade its vast pool of informal operators, who are engaged in waste management process. Though regulatory measures could deterrent informal sector for waste collection or its processing in crude methods. Skill upgradation, handholding with affordable processing technologies, and tools would definitely improve their working condition, safety and health and economic condition in the long run. Upgraded informal units would then prefer to be formal entity for better earning possibility.  This sector would continue to dominate in the country. Better skill set and appropriate technological will help them to protect environment as well as assist in saving significant amount of secondary raw materials with better yield. These upgraded units, however, need to be audited through third party for continuous improvement in recycling practices and ensuring health and safety measures.

GLOBAL BEST PRACTICES 

The electronics sustainability can be learned through following global best practices:

  1. Extended Producer Responsibility (EPR): This is a well-recognised policy which ensures manufacturers to take responsibility for the entire lifecycle of their products, including collection and recycling.
  2. Product Take-Back Programs: Industries or local government may organise programs where consumers can return end-of-life products for proper recycling or refurbishment.
  3. Standardization and Collaboration: The authority should encourage business houses to engage in industry-wide collaborations to standardize recycling processes and share best practices. R2 is one of the global recognised standards ensures refurbishing used equipment for longer use, advanced electronics recycling processes to maximize valuable recovery as well as reusable components from obsolete consumer electronics. Organizations like the Global E-Sustainability Initiative (GeSI) and the Electronics TakeBack Coalition are other examples of such collaborative efforts.
  4. Regulations and Certifications: The authority should encourage industries to adhere to international regulations and certifications related to e-waste, such as RoHS (Restriction of Hazardous Substances) and WEEE (Waste Electrical and Electronic Equipment) directives and also national regulations on the subject matter.
  5. Innovation in Recycling Technology: Government and industries should invest in and adopt new recycling technologies that improve the efficiency and effectiveness of material recovery from end-of-life electronics.

About R2 Standards

The R2 certification has been evolved through industry interactions and industry feedback and adapt to the changing landscape of global electronics use. The R2 certification is, therefore, dynamic. It has undergone three major revisions:

  1. R2v1: the initial version, was established in 2008.
  2. R2v2: The second iteration, was introduced in 2013.
  3. R2v3: The latest and currently active version, was implemented in 2020.

A transition phase is offered with the launch of every new version. During this period, organizations with expiring certifications can opt to renew under either the old or new standard. However, after a set timeframe, all renewals must comply with the latest standard.
R2v3 is particularly distinguished by its modular framework, which includes a set of mandatory core standards alongside a range of “Speciality Process Requirements.” In contrast to its predecessor, R2v3 places greater focus on safeguarding consumer information by enhancing data security measures. It also intensifies the criteria for securing materials handled by downstream vendors and provides clearer guidelines and expectations.

Need of R2 Certification
The challenges in environmental and health requirement increasingly necessitate improved electronics recycling, reuse and lifecycle management. By 2030, it is estimated that e-waste generation globally will reach an alarming 75 million metric tons annually2. Many industries are keen to address this problem with their contributions. Endorsing R2 certification will be the measure of dedication for the businesses to the most advanced methods in electronics recycling. R2-certified refurbished used equipment recyclers strive to maximize the recovery of valuable and reusable components from obsolete consumer electronics, thereby, reducing waste effectively.  
Moreover, adopting the R2 certification is not only environmentally beneficial but also makes commercial sense. With growing awareness about product lifecycle, numerous organizations now prefer to collaborate with recyclers who adhere to the highest management standards. For electronics manufacturers, recyclers or resellers of used electronic devices, obtaining this certification is a way to assure potential partners and customers that they handle end-of-life electronics responsibly, recycling or reusing them following the industry’s best practices.
Considering the importance of the certification, the R2 certification is getting popular among the businesses around the world. Presently, 1105 facilities in 41 countries have endorsed the R2 standards. This is also a fastest growing environmental certificate among e-waste refurbishers and recyclers in Asia and 50+ units in India have already adopted R2v3 certificate4.

R2 Certification process
Sustainable Electronics Recycling International (SERI) owns the R2 standards. The R2-certification process for electronics recyclers may take from eight to twelve months. The companies may engage specialized R2 consultant for guidance in obtaining this certification. Otherwise, they may also achieve this on their own.  SERI outlines following five-stages roadmap for obtaining R2 certification:

  1. Educational phase to gain a comprehensive understanding of the R2 standard.
  2. Implementation phase, where a business documents and modifies its facility processes to align with the standard.
  3. Collection of records and evidence demonstrating the business’s adherence to R2 requirements.
  4. Conducting an internal audit process to verify that the facility is in compliance with the standard.
  5. Undergoing a certification audit conducted by a certification body approved by SERI.

R2v3 standards requirements 
R2 adapts to variety of business models & specialties including core and process requirements. The R2v3 certification encompasses a set of core requirements applicable to all businesses seeking certification, in addition to “process requirements” that outline additional standards for companies involved in specific activities. This approach allows for a more streamlined R2 certification for small businesses engaged in limited activities, while full R2 certification is necessary for those companies comprehensively involved in all facets of electronics reuse and recycling.
The CORE requirements, applied to all R2 facilities, have following 10 mandatory steps:

  1. Scope
  2. Hierarchy of Responsible Management Strategies
  3. EH&S Management System
  4. Legal and Other Requirements
  5. Tracking Throughput
  6. Sorting, Categorization and Processing
  7. Data Security
  8. Focus Materials
  9. Facility Requirements
  10. Transport

The PROCESS requirements are the additional requirements, applied only for facilities that perform specific processes. Based on their business domain, following additional processes are included for the auditing:

  • Appendix A – Downstream Recycling Chain (Facilities outsourcing part of their recycling process must use Appendix A to ensure their partners adhere to certain standards)
  • Appendix B – Data Sanitization (R2v3 sets out requirements for erasing user data from devices, achievable either through physical destruction or logic sanitization, as detailed in Appendix B)
  • Appendix C – Test & Repair (Businesses that test and, if needed, repair used devices or prepare them for reuse must adhere to Appendix C standards, which cover device testing and data cleansing procedures)
  • Appendix D – Specialty Electronics Reuse
  • Appendix E – Materials Recovery
  • Appendix F – Brokering
  • Appendix G – PV Modules (added in 2024)

Advantage of Business houses aligning with Certified Recycler
Opting for an R2-Certified refurbisher ensures enhanced health and safety management system, quality, and a reduced environmental footprint. It provides thorough data sanitization from devices, adherence to rigorous testing protocols, and participation in an environmentally conscious supply chain. 

Collaborating with R2-certified electronics recyclers offers assurance that all potential and environmental health and safety risks are effectively managed. This approach safeguards against unexpected fines or negative media attention that could result from improper handling or disposal of your assets.

MARKET OPPORTUNITY
A circularity in electronics industry transcends mere waste management, it embodies resilience, resources efficiency, and economic property. ICEA predicts in 2023 that circular electronics business models have the potential to create a $7 billion market in India by 2035. These models include circular design, product-as-a-service, repair, resell, refurbishment, and recycling. The current projected market size for these models stands at $13 billion by 2035, but the total addressable market could be as high as $20 billion with the right public and private sector actions. About 35% of this revenue potential may remain untapped, leading to wasted embedded value and capacity5.
In the electronics sector, three business models, repair, resell, and recycling, are already being implemented at scale. Informal and formal sectors together managed the recycling of around 119 million devices in FY21, while 55 million devices were repaired, and 50 million devices were resold as-is. However, refurbishment, product-as-a-service (PaaS), and circular design are still in their early stages, presenting untapped opportunities. Only about 3 million devices were refurbished in FY215.

The repairing sector is dominated by informal operators, with 60% of repair demand coming from the after-sales market. Refurbishing is a growing market, primarily driven by tier II and tier III cities, offering notable profit margins. In recycling, 90% of WEEE (Waste Electrical and Electronic Equipment) collection is handled by the informal sector. Scaling up the formal sector’s recycling efforts is a challenge due to suboptimal cost structures and inadequate technologies for difficult-to-recycle fractions5.
The recycling market potential in India is expected to reach nearly USD 13 billion by 2035, assuming the current pace of economic activities. With effective implementation of Extended Producer Responsibility (EPR) compliances under the E-waste Management Rules 2022 and transformation of electronics industry practices, the market could potentially reach USD 20 billion, tapping into the untapped $7 billion market potential by 2035.

GLOBAL BEST PRATICES TO MITIGATE PRESENT CHALLENGES

Global best practices in auditing for Circular Economy in electronics sector can be elaborated as below:

  1. Lifecycle Assessment (LCA): Conduct comprehensive lifecycle assessments to evaluate the environmental impact of products from production through disposal. This helps identify areas where circularity can be improved.
  2. Compliance Audits: Regularly audit compliance with environmental regulations, sustainability standards, and corporate policies. This includes verifying that products meet regulatory requirements and are being recycled properly.
  3. Performance Metrics: Develop and track metrics related to sustainability goals, such as the percentage of recycled materials used, the number of products returned for recycling, and reductions in carbon footprint.
  4. Supply Chain Audits: Ensure that all suppliers adhere to sustainable practices and that materials are sourced responsibly. This involves auditing supply chain practices for compliance with environmental standards.
  5. Transparency and Reporting: Provide transparent reporting on sustainability initiatives, progress towards circular economy goals, and any challenges encountered. These build trust with stakeholders and helps in continuous improvement.

Implementation steps for the business houses for adopting CE principle in electronics secrtor: 

  1. Develop a strategic plan that integrates circular economy principles into the business model. Set clear objectives, timelines, and responsibilities.
  2. Engage with stakeholders, including suppliers, customers, and regulatory bodies, to ensure alignment and collaboration.
  3. Provide training for employees and partners on circular economy practices, including design for recyclability and responsible waste management.
  4. Continuously monitor progress and evaluate the effectiveness of implemented strategies. Use insights gained to refine and improve practices.
  5. Stay updated with advancements in technology and best practices. Invest in research and development to enhance circularity in electronics.

Globally, lot of benchmarking has been established in entire ecosystem to track circularity in business process. Design change, component modularity, green material, refurbishment of products for longer life and secondary raw materials extraction with desired resource efficiency etc. are employed with perfection so as to reduce overall manufacturing cost and save environment. 

In India, though CE has gained traction, a lot of challenges still persists. The informal sector is still predominant and manages a significant portion of the waste collection and recycling and thereto damages the environment beyond its repairability. This needs to be fixed through strict regulatory interventions and promotion of responsible recycling practices, ensuring global best practice in recycling process like R2 standards. 
Moreover, the consumer awareness and easy access to formal recycling option will channelize materials to the formal units. Formal sector may achieve competitiveness by leveraging informal strength by offering suitable incentive. India should also establish a refinery of global standard for metal extraction, so that recyclers should have a viable option of downstream units. Strengthening demand of the secondary raw materials is another important driver for achieving the circular economy in electronics sector. 

CONCLUSIONS
A circular economy (CE) is an industrial system that contrasts with the linear take-make-dispose model. CE emphasizes restoration and regeneration, prioritizing superior design, waste reduction, and resource value retention. India aims to become prominent electronics manufacturing destination, requiring substantial raw materials. To meet this demand sustainably, the electronics industry must adopt CE practices.

CE presents opportunities in repairing, refurbishing, and recycling. Informal operators dominate the repair sector, with 60% of demand coming from after-sales markets. Only 18% is served by the formal sector, leaving 22% unaddressed. The refurbishing sector, though growing, is still small, with only about 6% of resold devices being refurbished. Tier II and III cities are showing increased demand due to lower costs, offering significant profit margins (>20%)5.  
India’s recycling market could reach nearly USD 13 billion by 2035 at the current pace. Effective EPR implementation and industry transformation could push it to USD 20 billion, tapping into the untapped market of USD 7 billion by 2035. Approximately 90% of Waste Electrical and Electronic Equipment (WEEE) collection is managed by the informal sector, with around 206 million devices remaining as idle inventory5.

R2 standards could play a pivotal role in streamlining refurbishing and recycling market in India and realize the potential CE market, which is presently dragged to informal economy due to lack of regulations and compliances. The independent third-party audit with internationally established processes will ensure evidence-based processes, proper data sanitization, accurate mass balancing through downstream vendors.  Adherence to R2 requirements will ensure record collection and evidence demonstration in business, internal audit process to verify the compliance of the facility. The data generated from such units can then be considered authentic.  Mandating such standards in the country will ensure the seamless validation of the data on four metals generated in CPCB website as secondary raw materials repository for future economic growth. 

References:
https://images.app.goo.gl/mHTnduqjSiFYzY677
https://images.app.goo.gl/aDaC9xnL8oq7C7yk6
https://www.google.com/imgres?h=667&w=1200&tbnh=167&tbnw=301&osm=1&lns_uv=1&source=lens-native&usg=AI4_-kQSgY306Po_GsFZHoimrIVMcutfSw&imgurl=https://images.indianexpress.com/2023/07/environment-1200.jpg&imgrefurl=https://indianexpress.com/article/lifestyle/life-style/world-nature-conservation-day-2023-history-theme-importance-8864765/&tbnid=Nicrj9QcfGO01M&docid=BMouWDukEYUBsM
https://images.app.goo.gl/mHTnduqjSiFYzY677
Author : Dr. Sandip Chatterjee
Sn. Advisor, SERI
Ex. Group Coordinator- MeitY