In 2019, Scotland became the first home nation to declare a climate emergency, citing the circular economy as one way to drive down emissions and positively contribute to the global climate setting agenda.
The following year, the wider UK government set out its strategy for decarbonising all sectors of the economy and meeting its net zero target by 2050.
As part of its strategy, the government sought to encourage individuals and organisations alike to recycle, reuse, or refurbish to reduce the amount of waste generated and sent to landfills. From an IT perspective, however, recycling is an energy-intensive process, and reusing equipment can mean sacrificing quality, speed and reliability.
As members of the technology sector and responsible businesses, we must therefore be looking to the refurbished market to support the green economy. Landfills are full of computers, tablets, and other electronic devices – also referred to as ‘e-waste’ – that have been discarded, but could have been made as good as new with a little work.
A complex challenge
E-waste is a global problem. It’s one of the fastest growing waste streams in the world and it often leads to contamination in soil and water. The UK is a big contributor to this, with households and businesses throwing away 300,000 tonnes of e-waste each year.
But the need for a greener economy doesn’t just stem from waste caused by products reaching the end of their lifecycle. IT equipment also produces a significant amount of waste and emissions during production. In addition, much of the IT equipment we use is built with rare materials, the extraction of which is fuelling climate change and creating pollution.
Put simply, the IT sector has historically been a negative contributor to the environment. We now have the capability to change that by increasing our use of refurbished products. In fact, a 2021 report from Aldersgate Group found the circular economy could deliver 80% of the emissions reductions the UK needs to make to meet its goals for 2028-2032. Aiding this should be our goal.
And while the environmental benefits are huge, there are other reasons for businesses to choose refurbished. For example, some enterprise manufacturers are quoting a lead time of over 100 days to fulfil orders, leading to huge delays for businesses. Refurbished vendors, on the other hand, have items readily available, in some cases being delivered within 24 hours of placing the order.
Businesses can also get more for their money by choosing refurbished equipment. For example, a business planning to buy a new server for £10,000 may be able to get a refurbished one with the same specs for half that – or one with more capacity for the same price.
We know there is little downside for the end-user in using refurbished equipment; over the past two decades, the industry has matured and there are far higher professional standards than when it was in its relative infancy at the turn of the millennium, including warranties as good as buying new. In many cases, refurbished products are comparable to new ones in terms of their performance.
The challenge lies in changing perceptions among businesses, to encourage them to think of refurbished first when choosing new or upgrading IT equipment.
The move to remote working coupled with a global shortage of semiconductors and supply chain challenges last year has undoubtedly made the circular economy more attractive to businesses looking to invest and stay ahead during the difficulties of the past few years. But offices throughout the UK are reopening. Delays across the supply chain are coming to an end. As an industry, we can’t rely on these alone to drive forward the green economy.
Government incentives and other subsidies will be key to ensuring businesses continue considering refurbished. In the December budget, the Scottish Government allocated £43m towards supporting this sector; the wider UK government needs to also consider how to incentivise companies to reduce or remove emissions from their supply chain.
A good place to start would be for the UK government to update the super-deduction allowance, which lets British businesses claim back up to 25p for every £1 they invest in ‘qualifying machinery and equipment’, before it ends in April 2023. Refurbished machinery isn’t currently included in this but – given the crucial role it has played in helping businesses access lower-cost, quality machinery while supporting carbon-friendly business decisions – it should be. However, the government did note in the March 2022 budget announcement that all cloud costs, including storage, will be included in the R&D tax relief system moving forward, which helps some.
Businesses everywhere are looking at how to reduce their spend, while governments look to reduce waste and carbon emissions. The circular economy is the ideal marriage of these two goals.
There is, of course, a time and place for new equipment, but if the UK wants to get serious on supporting the circular economy and meeting its net zero target by 2050, refurbished needs to be prioritised and support given to businesses to enable more carbon-friendly investment decisions.