Circular ICT procurement is to drastically reduce waste
The Dutch ICT chain guarantees a continuously growing flow of depreciated ICT hardware. As of this year, we will jointly discard more than 50 million ICT hardware products. Promoting circularity in the ICT chain is crucial to make the increasing digitization in Dutch society feasible and sustainable. With an annual purchasing volume of 43 million ICT products, the Dutch business community in particular has a major impact and can accelerate the transition to circularity in the chain in order to realize the regional ambition of 100% circular purchasing by 2030.
If all companies make the switch to circular ICT procurement by, in a first crucial step, extending the lifespan of their equipment from 3-4 to 5-7 years, waste flows and emissions can be reduced by 50 percent, and then to the zero to work on the basis of complete circularity. This is evident from the research ‘Towards a circular chain for ICT’ of the Utrecht Sustainability Institute (USI) on behalf of the Amsterdam Economic Board.
The results of the research form the starting point of a multidisciplinary working group, based on a data center energy saving initiative LEAP , in which hardware suppliers, resellers, buyers, data centers, governments and knowledge institutions participate. The working group will draw up a guide for purchasers. In addition, they will gain experience with the application of various circular solutions, and with the monitoring of circular use of ICT. The aim is to stimulate the purchase of circular alternatives. In this way, the Amsterdam Economic Board actively aims to inform and encourage purchasing organizations to integrate energy-efficient circular ICT in procurement and tenders in the context of the regional ambition to achieve 100% circular procurement by 2030.
‘Companies need to replace IT equipment less quickly to prevent pollution’
– Het Financieele Dagblad on circular ICT on March 5, 2021 –
Increasing influence of ICT on greenhouse gas emissions
The Dutch ICT hardware stack grows annually by five million products, and each year 860,000 more ICT products are thrown away than the year before. With a ‘stock’ of 247 million ICT products in 2018, an annual increase of five million products with an average depreciation period of 5 years, more than 50 million ICT products will be ‘released’ annually from 2021. The production and use of hardware takes a lot of energy and is accompanied by pollution – both in the production phase and in the waste phase. The current contribution of the global ICT sector to emissions (production and use) is estimated at three to six percent. That is close to emissions from the global cement industry. Recent studies predict that, if the current growth trend continues, the production and use of ICT will be responsible for 14 percent of global greenhouse gas emissions by 2040. This is comparable to the emissions of the entire transport sector or the energy consumption in the built environment worldwide.
Consumption reduction, life extension, reuse and refurbishment
Reducing the negative impact of production and use of ICT turns out not only to be a matter of it reducing energy consumption and making the switch to renewable energysources . At the same time, society must embrace circular ICT hardware at an accelerated pace in order to achieve further greenhouse gas reduction. Making hardware from constantly new raw materials is extremely energy-intensive and represents 45% of the total potential of CO2 reduction. In addition, circularity in ICT hardware prevents scarce materials from critical raw materials from being exhausted. Circular solutions such as reducing consumption, life extension, reuse and refurbishment appear to be essential to reduce CO 2 -footprint of ICT and offer plenty of opportunities for entrepreneurs to structurally purchase less hardware, collect more, repair or improve, and bring it back into the Dutch economy.
“The Dutch invest around € 9.5 billion annually in ICT hardware. The business market accounts for 55% of this. This provides good opportunities to manage a circular ICT chain. For example, purchasing organizations can make an important contribution to improve the security of supply of ICT, reduce the environmental impact and strengthen the national and regional economy. In addition, circular ICT ensures cost reduction for purchasing organizations. Research shows that extending the lifespan of hardware buyers can achieve savings of 20% or more on purchase costs. The choice for refurbished equipment generally results in purchasing organizations 50% or more cost savings, without having to compromise on functionality and quality, ”says Claire Teurlings, Lead Circular Economy at the Amsterdam Economic Board.
Circular ICT chain still niche market
Despite the fact that large hardware manufacturers invest in circular solutions, circular ICT remains a niche market for the time being, with a limited share of only a few percent, compared to conventional production and sales. Good examples of this are modular hardware where obsolete components can be replaced and Flexible product design aimed at replacing or adding modules. There is also a growing popularity for hardware lease or service models. This creates a shift from ‘paying for possession’ to ‘paying for use’. In addition, there are already very nice solutions available on the market. For example, innovations in the use of materials and design for reusability are being worked on, so that access to and dismantling of components becomes easier. Yet at the same time, there is hardly any demand for circular solutions in both the business and consumer markets. Suppliers in the chain are not concerned about the availability and scarcity of critical raw materials. The urgency for circularity is not yet felt (financially). In the supply chain, more awareness is also needed about the urgency and the potential of circular ICT – for ICT companies and customers – deserves more visibility.
50 million discarded appliances per year: how do we make the ICT sector more sustainable? In any case, recycling is not the solution
– de Volkskrant on circular ICT on 5 March 2021 –
About the report
This study was set up by the Amsterdam Economic Board, as part of the MRA’s raw materials transition program. The report (author: dr. Joppe van Driel, Utrecht Sustainability Institute) forms a triptych together with the 22nd Circular Economy Lab: Circular procurement of ICT and the 23rd Circular Economy Lab: Circular data servers, which the Utrecht Sustainability Institute organized in collaboration with the Amsterdam Economic Board. These broadcasts with pitches and panel discussions from experts are here looking back.
Report – Towards a circular chain for ICT – USI by order of the Amsterdam Economic Board
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