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Now is the time to invest in sustainable manufacturing, says ING

End manufacturers in the tech industry should seize the opportunity presented by cheap raw material costs and invest in more sustainable business models, according to a new report from ING Bank.

End manufacturers in the tech industry should seize the opportunity presented by cheap raw material costs and invest in more sustainable business models, according to a new report from ING Bank.

Focusing on the price of metals in particular, the report argues that now is the optimal time to invest in sustainable and resource efficient business models before prices rise in coming years.

The report suggests that current low prices for metals – caused by an increase in mining capacity and the dropping of trade barriers – mask the longer term challenges faced by European industry, and manufacturers in the technology supply chain in particular. 

Rising demand

Rapidly growing demand for raw materials in Asia is expected to bring an end to cheap metal imports for Europe. Demand for aluminium in China alone has grown five-fold over the past decade. 

In the longer term, tougher environmental regulations and societal pressures will also affect supply. 

Other trends are also having an impact, such as the growth in some low carbon and environmental technologies which depend heavily upon rare earth metals. For example, demand for gallium, which is used in LED lamps, is expected to be nearly 400 per cent higher than current production by 2030. 

Product design

According to Jurjen Witteveen, senior economist at ING, the current situation represents a perfect opportunity to invest in new ways of designing products to maximise the use of materials, increase resilience and prepare for a more circular global economy.

“The current low price environment makes mining companies ‘tired’ and the rest of the value chain ‘lazy’”, he said. “Manufacturers should take advantage of the current low price window and invest in strategies to create a more efficient supply chain.”

“The design stage is critical – a culture shift towards creating products that are easily recycled or remanufactured will take us one step closer to a circular economy.”

Although reusability and recyclability are often currently overlooked in favour of price and ease-of-use by most manufacturers, the gradually accelerating consumer trend from “ownership to use” is expected to drive the demand for more ‘componentised’ and remanufactured products in future.

Circular economy

The report’s emphasis on embedding recyclability and circular material flows into product design is likely to be mirrored by the EU’s revised circular economy policy package, which is set to be announced shortly following a 12-week consultation.

The EU’s widely anticipated proposals for supporting the development of a more circular economy are expected to include more stringent requirements on production and extended producer responsibility.