After The Crisis, Let’s Use Technology To Move Towards A Circular Economy

The day before the UK Prime Minister said everyone who could work from home should, the EU released an action plan on how to mitigate the negative effects of increased digitalization. Working in an industry like ours throws the tension between these two things into sharp relief.

On the one hand, the benefits of digital communication and remote collaboration have been brought into sharp focus by the Covid-19 pandemic. With so many transactions online, many companies can continue to operate even with a skeleton staff. We can also continue to collaborate on projects without face to face meetings and keep in touch with people we care about through video and social media.

On the other hand, our increased use of devices, and transmission of data needs careful management to make it sustainable.

We have one word

The new EU Circular Economy Action Plan, published 11th March, received a significant amount of attention in the mainstream press before it was overtaken by events. Beginning with “There is only one planet Earth, yet by 2050, the world will be consuming as if there were three,” the document proposes a wide-ranging road map for a cleaner, more efficient society. It had a lot to say about IT infrastructure in the process.

IoT, Big Data, Blockchain, and AI are all mentioned as methods of accelerating circularity, dematerializing and making Europe less dependent on primary materials. The report does not mention this, but there are clear advantages of this on greenhouse gas reduction too.

A tiny sliver of silver in the Covid-19 lockdowns has been that levels of greenhouse gasses CO2 and methane, carbon monoxide and nitrogen dioxide – emitted by traffic and industry – have fallen dramatically as people have stayed put. This has been largely facilitated (or at least been made much easier) by the technology behind our supply chains, healthcare provision, banking, business, and government.

Whilst scientists and the World Health Organization warn this hiatus will probably not help us with the Climate Emergency long term, we do have real evidence of what an increased use of digitalization could do for us as a species. However, it would have to be a well-designed, sustainable version of digital to make this work. At the moment, that is a work in progress.

The cost of IT hardware

The EU Circular Economy Action Plan states that electronics and electronic equipment continues to be one of the fastest-growing waste streams in the EU, with current annual growth rates of 2 percent. It also points out that global consumption of fossil fuels, metals and minerals is expected to double over the next 40 years with more than 90 percent of biodiversity loss and water stress as a result of resource extraction and processing.

With the number of data centers on the rise, the hardware contained within them becomes an increasingly big issue. Servers are not only the biggest energy cost in the data center, they are a significant material cost too. Made up of steel, aluminum, and plastics (all in the top five for industrial greenhouse gas emissions worldwide) as well as precious metals and Critical Raw Materials, refreshing this hardware every three years and disposing of the old equipment is not sustainable long term.

Little wonder, then, that the European Commission is set to present a ‘Circular Electronics Initiative’ to promote longer lifetimes on a range of products including data center IT hardware. Actions include regulatory measures for servers and storage under Ecodesign Directive to ensure devices are built for energy efficiency and durability, reparability, upgradability, maintenance, reuse and recycling. An upcoming Ecodesign Working Plan will set out further details on this. There is also to be a focus on electronics and ICT as a priority sector for implementing the ‘right to repair’, including a right to update obsolete software on existing equipment.

A circular economy boosts jobs

The case is strengthened because it makes good economic sense to reuse, redeploy, remanufacture and recycle. A recent study cited by the Circular Economy Action Plan estimates that applying circular economy principles across the EU economy has the potential to increase EU GDP by an additional 0.5 percent by 2030 creating around 700,000 new jobs.

Evidence also suggests a saving for companies too. The action plan states that materials make up, on average, 40 percent of the costs at manufacturing firms in the EU, so closed loop models could increase their profitability, while sheltering them from resource price fluctuations. Stimulating more circular approaches to business seems to be a priority as a result.

The Commission is preparing to provide economic support for the Circular Economy with InvestEU, which attracts private investment. There are also plans afoot to enable Member States to reduce VAT payments on repair services for end users.

The plan represents significant steps forward towards increasing the ability to repair and upgrade obsolete software for IT hardware, enabling equipment to last longer and helping to reduce the carbon footprint and resource extraction.

The EU Circular Economy Action Plan will help organizations like mine to buy redundant data center IT hardware, sanitize the data, restore equipment to factory condition and supply second life spares, upgrades and remanufactured machines to the data center sector. However, the plan will also do much more than that.

Initiatives like this bring sustainability into the mainstream of business conversation… which is exactly where it should be.

―DCD