Turnaround to circular ICT procurement must drastically curb waste pile

Growing stream of discarded ICT hardware generates 50 million annual scraps
The Dutch ICT chain guarantees a continuously growing stream of discarded ICT hardware. As of this year, we collectively discard over 50 million ICT hardware products. To make the increasing digitalization in Dutch society feasible and sustainable, promoting circularity in the ICT chain is crucial. With an annual procurement 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 to achieve the regional ambition of 100% circular procurement by 2030. If all companies make the transition to circular ICT procurement by, in a first crucial step, stretching the lifespan of their equipment from 3-4 to 5-7 years, waste streams and emissions can be reduced by 50 percent, and then work towards zero on the basis of full circularity. This is evident from the study 'Towards a circular chain for ICT' by the Utrecht Sustainability Institute on behalf of the Amsterdam Economic Board.

The results of the study are the starting point for a multidisciplinary working group, from the 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. They will also gain experience with the application of various circular solutions and with the monitoring of circular use of ICT. The goal is to stimulate the purchase of circular alternatives. With this, the Amsterdam Economic Board is actively engaged in informing and encouraging purchasing organizations to integrate energy-efficient circular ICT in procurement and tendering in the context of the regional ambition to achieve 100% circular procurement by 2030.

ICT sector as one of the most polluting sectors
The Dutch ICT hardware stack grows by five million products each year, and each year 860,000 more ICT products are thrown away than in the previous year. With a 'stock' of 247 million ICT products in 2018, an annual increase of five million products with an average depreciation period of five years, more than 50 million ICT products will be 'released' each year from 2021. ICT is thus fast becoming one of the most polluting sectors. Production and use of hardware consumes a lot of energy and is associated with 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. This is close to the emissions of the global cement industry. Recent studies predict that, if the current growth trend continues, production and use of ICT will be responsible for 14 percent of global GHG emissions in 2040. This is comparable to emissions from the entire transportation sector or energy consumption in the built environment worldwide.

Consuming, life extension, reuse and refurbishment
Reducing the negative impact of the production and use of ICT turns out not to be just a matter of reducing energy consumption and making the switch to renewable energy sources. Society must simultaneously embrace circular ICT hardware at an accelerated pace to achieve further greenhouse gas reductions. After all, making hardware from ever-new raw materials is hugely energy-intensive and represents 45% of the total potential for CO2 reduction. In addition, circularity in ICT hardware prevents the depletion of scarce materials derived from critical raw materials. Circular solutions such as consumption, life extension, reuse and refurbishment appear essential to keep the CO2 footprint of ICT within limits and offer ample opportunities for entrepreneurs, to structurally purchase less hardware, collect, repair or improve more, and bring it back into the Dutch economy.

"The Dutch invest some €9.5 billion annually in ICT hardware. The business market accounts for 55% of this. This provides good opportunities to steer towards a circular ICT chain. For example, buying organizations can make a significant contribution to improve the security of supply of ICT, reduce the environmental impact and strengthen the national and regional economy. In addition, circular ICT reduces costs for purchasing organizations. Research shows that through life extension hardware buyers can save 20% or more on procurement costs. Choosing refurbished equipment generally provides purchasing organizations with 50% or more cost savings, without having to compromise on functionality and quality," said Claire Teurlings, Lead Circular Economy at the Amsterdam Economic Board.

Circular ICT chain still a niche market
Despite large hardware manufacturers investing 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 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 lease or service models for hardware. This creates a shift from 'paying for possession' to 'paying for use'. In addition, there are already very good solutions available in the market. For example, innovations in material use and design for reusability are being developed to facilitate access to and dismantling of components. 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). Also in the supply chain more awareness is needed about the urgency and the potential of circular ICT - for ICT companies and customers - deserves more visibility.

About the Amsterdam Economic Board
The Amsterdam Economic Board works with businesses, governments and knowledge institutions towards a smart, green and healthy future of the Amsterdam Metropolitan Area. To strengthen the well-being and prosperity in the Metropolis of Amsterdam, the Amsterdam Economic Board contributes to six metropolitan challenges: Circular Economy, Digital Connectivity, Energy, Health, Mobility and Talent for the Future.