Resource efficiency has moved up the policy agenda at both the European and national level.  Several reasons appear to lie behind this shift.

First is a concern over continuity in material supplies.  Population growth, urbanisation and industrialisation in the emerging economies of, in particular, China and India has resulted in more competition for raw materials.  This is not only in terms of obtaining materials to manufacture goods for export but to supply products to their own markets.  As the people of China and India take to buying fridges, computers, mobiles and other electrical products so demand for metals like cobalt, platinum and rare earths intensify.  Indeed, it is estimated that the global extraction of resources will be 100 billion tonnes in 2030, an increase of 75% in 25 years.

Materials markets are not only affected by increases in demand, however.  Supplies may dwindle or else be cut short by the imposition of export quotas.  With rare earths, for example, China is responsible for around 97% of global extraction.  This has become a concern for European electrical product manufacturers of late since the Chinese government has put in place a series of quotas; it has also voiced the possibility of an export ban from 2015.  If this happens, manufacturing costs are likely to rise, creating the potential for product price increases – something that would no doubt be a concern for electrical retailers as well as manufacturers.

The environmental impacts of extraction have a bearing on policy too.  The impacts can be large and long-lived.  The sustainability of further extraction needs to be thought through in many cases.  It could be that obtaining materials from waste products presents a better option than, say, mining difficult to obtain ores.  And yet recycling is not currently being applied on a scale to make material reclamation widespread.

Policy responses

2011 seems to be the year for resource efficiency in Brussels.  We have seen it established as a flagship initiative, and the European Commission has issued communications on subjects like raw materials and commodity markets, and ideas like a ‘Raw Materials Innovation Partnership’ have been consulted upon.  By and large these developments are of a strategic nature and place an emphasis on things like regaining raw materials ‘know-how’, fostering secondary markets and introducing standards to promote greater use of recycled materials.  For manufacturers of electrical products, one issue is of particular relevance: ecodesign is tipped as a legal instrument for creating resource savings.  This coincides with the evaluation work currently going on in support of the Ecodesign Framework Directive review.

Resource efficiency is also on the agenda in UK environmental policy.  Not only does it feature in the waste policy reviews but the specific issue of maintaining access to important metals was the subject of a Commons inquest.  This inquest heard from the British Standards Institution on its new standard concerning the sustainable use of materials and the Royal Institution of Chartered Surveyors (RICS), which is calling for a rare earth metal recycling scheme to be developed.  RICS claims that abundant quantities of rare earths already exist ‘above ground’ in the form of obsolete electrical and electronic equipment, with an estimated 30 million computers and laptops containing these metals currently lying unused in the UK.

Implications

Maintaining access to raw materials and policy responses to enhance resource efficiency are of importance to manufacturers of electrical products.  Manufacturers rely on materials to make their products but must also comply with the legislation that regulates their production and, potentially, dictates product design and material content requirements.

The issues are also of importance to retailers.  Reduced access, for example, is likely to affect commodity prices and therefore production costs – costs that could eventually lead to products being sold at higher prices in retail outlets.  The issues additionally highlight the complexity of global supply chains and the need for a greater understanding of what resources are used in product manufacture.  Achieving this understanding involves looking at the lifecycles of products and the various parties involved in their production, marketing and sale – retailers included.

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