Towards a circular economy: value-retention processes

Value-retention processes (VRPs) are key activities of the circular economy. They aim to retain the value of a product within the economic system, and help to increase both economic and environmental sustainability and resilience. The International Resource Panel of the UN describes them as activities, typically production-type activities, that enable the completion of and/or potentially extend a product’s service life beyond traditional expected service life. These processes include:

• arranging direct reuse
• repair
• refurbishment
• comprehensive refurbishment
• remanufacturing.

Types of value-retention processes

Here are the definitions from the International Resource Panel:

Remanufacturing

A standardized industrial process that takes place within industrial or factory settings, in which cores are restored to original as-new condition and performance, or better. The remanufacturing process is in line with specific technical specifications, including engineering, quality and testing standards, and typically yields fully warranted products. Firms that provide remanufacturing services to restore used goods to original working condition are considered producers of remanufactured goods.

Comprehensive refurbishment

Refurbishment that takes place within industrial or factory settings, with a high standard and level of refurbishment.

Refurbishment

Modification of an object that is waste or a product to increase or restore its performance and/or functionality or to meet applicable technical standards or regulatory requirements, with the result of making a fully functional product to be used for a purpose that is at least the one that was originally intended.

Repair

Fixing a specified fault in an object that is a waste or a product and/or replacing defective components, in order to make the waste or product a fully functional product to be used for its originally intended purpose.

Arranging direct reuse

The collection, inspection and testing, cleaning and redistribution of a product back into the market under controlled conditions (e.g. a formal business undertaking).

Advantages and opportunities

VRPs offer significant benefits for businesses, Canadians and the environment. According to an Environment and Climate Change Canada study based on 2019 data, VRPs are approximately worth CAD$56 billion annually, and support more than 371,000 direct jobs in Canada. According to the same study, each year, VRPs prevent approximately 1.6 million tonnes of carbon dioxide equivalent (CO_2e) from entering the atmosphere, and avoid the use of 470 kilotonnes (kt) of virgin materials - including 74 kt of plastics.

VRPs also make it possible to:

• create new employment opportunities (direct and indirect)
• reduce production costs for manufacturers
• offer cheaper products to consumers

Based on current projections, there is plenty of headroom to grow VRPs. By 2030, an increase in VRP activities could create at least 23,000 new direct jobs in Canada and generate at least CAD$3 billion in additional revenues. Annually, this increase would prevent the emission of at least an additional 170 kt of CO_2e into the atmosphere, the equivalent of taking approximately 37,000 cars off the road. In addition, it would prevent the use of 49 additional kt of virgin materials – including at least 5 kt of plastic.  These benefits would not only help reduce the quantity of waste sent to landfills, but also contribute to meeting Canada’s greenhouse gas emissions reduction targets.  

Some examples of value-retention processes in Canada

Many products that are the result of VRPs are available on the Canadian market. Here are some examples:

• Products from thrift shops and second-hand clothing
• Repaired furniture
• Used sporting goods
• Refurbished household appliances (such as refrigerator, dishwasher and washing machine)
• Refurbished electronics (such as cellphones and computers)
• Remanufactured car components (such as engines, hydraulic cylinders, clutches and alternators)

Related links

• Socio-Economic and Environmental Study of the Canadian Remanufacturing Sector and Other Value-Retention Processes in the Context of a Circular Economy
• Executive summary of the Socio-Economic and Environmental Study of the Canadian Remanufacturing Sector and Other Value-Retention Processes in the Context of a Circular Economy