Building a Circular Economy 

Remanufacturing can reduce dependence on natural resources and create a resource-efficient economy. 

By Rajiv Ramchandra

July 2023

Building a Circular Economy 

Rajiv Ramchandra (center) visits Cummins India’s facility in Pune to learn about their remanufacturing operations. (Photograph courtesy Rajiv Ramchandra)

I founded Re:CREATe in 2019, about six months before the COVID-19 lockdown. The inspiration behind Re:CREATe came from a policy research project I worked on with the EU-REI (European Union-Resource Efficiency Initiative) program and the Government of India, which provided the status of circularity, concerns and opportunities in four focus areas crucial in India’s transition to a circular and resource-efficient economy. My focus was on steel and aluminum.  

The research uncovered that remanufacturing was not being seriously considered in the evolutionary journey of the nation’s economy. A recommendation of the report was to “establish a remanufacturing council or association to catalyze the growth of the remanufacturing industry.” This felt like a calling to me, and I set about to make it happen.  

What is remanufacturing? 

Remanufacturing is an industrial process in which worn or non-functional products are returned to a same-as-new or better-than-new condition and performance. This way, end-of-life products and components are brought back into the economy, reducing the need for fresh natural resources. To qualify as legitimate remanufacturing, the process should be in line with specific technical specifications, including engineering, quality and testing standards, and should yield products with full warranty.  

Raising awareness 

Re:CREATe has been building awareness and coalitions within the industry by partnering with private sector companies and industry bodies, both within and outside India. 

In April 2022, Re:CREATe partnered with the U.S. Consulate General Mumbai and the Indo-American Chamber of Commerce to host a hybrid event titled, “Remanufacturing: The Future of Sustainable Business.” Speakers included John Chalifoux, chief sustainability officer at MEMA, The Vehicle Suppliers Association, which is headquartered in Washington, D.C.; and Sushant Naik, global head for government and public affairs at Tata Motors. Additionally, I visited the Pune facilities of Cummins India in May 2022 to learn more about their remanufacturing operations and discuss the opportunities for the growth of remanufacturing in India. Cummins is an American multinational corporation that specializes in fuel engines and generators.  

Benefits of remanufacturing 

Remanufacturing can: 

  • Help reduce greenhouse gas emissions by 79 to 99 percent in appropriate sectors. 
  • Reduce the requirement of new material by 80 to 98 percent. 
  • Increase skilled labor hours by up to 120 percent since remanufacturing, and sometimes refurbishment, have larger requirements for skilled labor. 
  • Lower production cost since remanufactured products are typically 60 to 80 percent of the cost of a new product due to savings from recovery of materials and energy content. 

Let us look at a couple of examples. As the demand for electric vehicles and other battery-powered devices grows at a rapid pace, remanufacturing used batteries presents a huge opportunity, ecologically, socially and economically. Batteries contain hazardous substances that can contaminate soil and groundwater, if not disposed of properly. Additionally, mining of materials like lithium—which is used in electric vehicle batteries—can also have negative environmental impacts. By remanufacturing batteries and giving them multiple full-use lifecycles, these materials can be prevented from ending up in landfills or entering the environment, where they can harm human health and the environment, as well as reduce the need to extract and consume natural resources.  

Remanufacturing could also help increase access to medical imaging devices like X-ray, CT scan or MRI machines. Hospitals or laboratories in low-income settings looking for upgrades could potentially opt for remanufactured imaging devices as they would be less expensive than new equipment but would work just like new. This is part of the broader movement of providing sustainable, affordable and accessible health care around the world. 

It is crucial however, that the practice of remanufacturing is carried out in alignment with robust standards and credible certifications, to ensure the highest product quality, as well as safety for all those in the value chain. Of course, products cannot be remanufactured indefinitely and material recovery systems through recycling also have their place in the overall industrial ecosystem. However, recycling should not be seen as the holy grail of the architecture of a circular economy. 

Sustainable manufacturing 

Remanufacturing takes place in various industries including the automotive, aerospace, consumer appliances, machinery manufacturing, electronics and medical device industries. Remanufacturing could potentially be expanded by leveraging government programs like Make in India, as well as production-linked incentives geared toward sustainable manufacturing. Consumer awareness campaigns have an important role to play to highlight the social, environmental and economic benefits of remanufactured products and dispel misconceptions that equate remanufactured products to second-hand goods. 

Rajiv Ramchandra is a sustainability practitioner and entrepreneur and the founder of Re:CREATe. 

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