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MPhil in Engineering for Sustainable Development

global challenges, engineering solutions

Studying at Cambridge

Padma Nayagam

Circular Economy in Industry

The current linear way (make, use, dispose) of working of automotive industry is failing to operate within planetary limits and can be seen as unsustainable. Circular economy (CE) provides a pathway to move away from the linear model to a closed system, wherein resources are kept in use as long as possible during the use phase and at the
end of service life, maximum value is recovered from the products and materials.

The research aims at evaluating possible ways forward to circular economy in European automotive industry. The research investigates the current state of circular economy practices in the automotive industry through engineering and policy viewpoint. Next, it identifies scope for improvement towards circular economy comparing the CE practices
in automotive industry and the CE practices in theory and by identifying barriers to the implementation of the theoretical CE practices in the existing automotive industry.


The barriers identi fied are largely owing to the working of current business model of product ownership used by the automotive industry. Thereby, the research investigates into the alternate business models and provides   recommendations of business models that have the potential to drive CE in automotive industry. Some of best practices of CE in both, the existing and new automotive businesses have been investigated through case studies, to show possible ways forward to CE.

Innovation in engineering practices like durable and recyclable materials, technology to recover maximum materials and to develop green energy resources viability in the value chain; are some of the identifi ed engineering practices towards CE. Other key  finding is that the business models and strategies, act as an important driver to transition
towards circular economy. For the existing automotive industry, the initiatives taken by JLR and TMC, and the second life business model, are suggested as a way forward to CE. For the budding automotive companies, the performance model as demonstrated by riversimple is identified as one of the best practice case for moving towards circular
economy. For companies transitioning between these two business models, the service based free  floating business model, is suggested as a way forward to CE. Other  finding is collaboration with the stake holders for mutual benefits and shared values would be a key for driving CE across European automotive industry.

The value chain of automotive industry is very complex and transitioning towards CE can be a challenge. The research has attempted to recommend some possible ways forward to CE by European automotive industry. However, caution has to be maintained that these are the possible ways and cannot be directly copy-pasted to every similar automotive company. Each case has to dealt separately and detailed feasibility has to carried to understand which of these factors can be implemented in the respective case.