Great savings potential possible with smartphones through circular use
The electronics sector is still very linear today, i.e. there are hardly any circular economy models. Using a new evaluation method for circular business models, it has now been calculated that in Germany alone, annual emissions from the use of smartphones could be reduced by up to 20 percent and the number of new cell phones could be reduced by 2-3 million if the majority of users either rented or bought them second-hand. There is therefore huge untapped potential in the use of circular models instead of the current buy-and-throw-away principle, as the recently published report by Circularity shows.
Here are the most important key facts:
- New data shows: Buying and renting used smartphones can reduce annual emissions by up to 20% - and extend their lifespan by over 30%.
- If 80% of users rented or bought used smartphones, 200,000 tons of CO2 could be avoided in Germany every year and the number of new devices brought onto the market could be reduced by 2-3 million devices per year.
- Today, circular business models reach about 20-50% of their maximum impact potential. Although there is still room for improvement, about half of the carbon footprint of products will have to be managed through product and end-of-life strategies.
"Measuring Circular Impact" report on the evaluation of circular models
Circularity, the do-tank and companion for the circular economy, has this week published its practical report "Measuring Circular Impact", which presents the first comprehensive method for realistically assessing the environmental impact of circular business models. Developed by Circularity in collaboration with 12 leading industry partners (Vodafone, Telekom, Assurant, rebuy, Grover, FixFirst, re!commerce, Foxway, Ingram Micro Lifecycle, Reverse Logistics Group, circulee, Everphone) as well as Systemiq, Fraunhofer IZM and Deloitte, the report shows how circular business models, such as the sale and rental of second-hand goods, can significantly reduce environmental impact.
"What makes the CBMI method so unique is its consideration of real device usage," says Marina Proske, Group Leader Life Cycle Modeling, Fraunhofer IZM. "It enables companies to create data-based insights and act on measurable results."
A broken system - are circular business models the solution?
Actual status Germany:
- Only 14% of smartphones and laptops in circulation are second-hand
- Repair rates are still low
- Only 30% of appliances are formally recycled - valuable resources such as rare earths, metals and plastics are lost instead of being returned to the cycle.
"The electronics sector is still very linear," says Manuel Braun, Senior Director, Systemiq. "But with the right incentives, circular models can help us close resource loops on a large scale.
"What has been missing until now is a clear overview of how devices actually move through the system. The system map in this report provides just that - it provides a common starting point to understand where interventions are most needed," Braun continues.
Circular business models offer a potential solution by keeping products in the loop for as long as technically possible. Until now, companies, investors and policy makers have lacked practical tools to measure the actual environmental impact of circular models - especially across multiple users and lifecycles. Existing frameworks such as the GHG Protocol only capture these dynamics to a limited extent.
"The CBMI method fills a critical gap in sustainability measurement," says Carolin Schmid, Deloitte Topic Lead Customer Strategy in Circularity. "By focusing on the actual use phase, it puts customer behavior at the center. This enables a much more realistic assessment of circular strategies - especially in complex sectors such as the electronics industry. As a result, companies, investors and policy makers finally have the ability to track, compare and scale effective circular solutions."
The new method shows when closed-loop models work - and what slows them down
The CBMI methodology bridges this gap, focusing on actual product usage - including net active use of devices, repair behavior, return rates and resale decisions of B2C and B2B consumers - to help companies determine the extent to which their circular models reduce emissions and resource consumption.
The report shows:
- Emissions from logistics and refurbishment only account for around 3% of the lifetime footprint of a smartphone
- Longer use can reduce annual emissions by up to 20%
- Professional second-hand resale can extend the life of a smartphone by up to 33% and reduce annual CO2 emissions by around 20%,
- Rental models generally extend the service life by more than 17% and at the same time reduce emissions by around 11%
- Rental models reduce emissions from infrequently used devices such as games consoles in particular by up to 19 % thanks to better utilization
- In the B2B sector, for example, refurbished smartphones can remain in use for up to seven years and reduce annual emissions by up to 20 %
"We see huge untapped potential in the devices that already exist," says Dr. Paul Wöbkenberg, co-founder of Circularity. "Today, around 50% of devices in private ownership and 70% of devices in companies are never reused - often not because of technical limitations, but because of a lack of or unknown return options, low incentives or concerns about data security."
"Circular business models are incredibly promising - but until now it has been difficult to measure their true environmental impact," adds Dr. Marianne Kuhlmann, co-founder of Circularity. "This report gives companies the tools to move from assumptions to evidence - and develop models that really make a difference. It also identifies practical levers that companies can use to reduce emissions and extend product use."
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