Lower Carbon, Less Materials: A ‘Systems’ Approach

Around a quarter of all GHG emissions are released during the transformation of minerals, fuels and ores into materials such as steel, cement, plastics and aluminium.1 These materials are used to manufacture products central to households and industry, including vehicles, buildings, machinery and appliances.

On the supply side, some efforts are underway to reduce the emission intensity of these production processes. A complementary strategy is to explore opportunities around how these materials are used. More efficient use of materials could reduce material demand and further reduce industrial GHG emissions. Despite its potential, the Intergovernmental Panel on Climate Change recently observed that ‘material efficiency’ has received relatively little attention to date.

The aim of material efficiency is to deliver the same products and services with less new material. A variety of strategies could be introduced throughout the lifespan of a product to achieve this goal. For example, from the outset product designers can select lightweight, high performance materials. They can also reduce the amount of materials needed by reducing product dimensions or designing a product in a way that minimizes its weight. Furthermore, during product manufacturing, companies can focus on reducing the amount of scrap material that is generated. If scrap material and waste cannot be avoided, there may be options to reuse or recycle manufacturing scrap. Reusing and recycling material tends to generate fewer GHG emissions than producing material from new sources.

Once a product has been manufactured and sold, further opportunities for material efficiency depend on how the product is used. If products are repaired and then kept for longer, demand for new products can fall. Similarly, if products are shared between individuals then overall demand for products could also fall. Finally, at the end of a product’s working life, there may be opportunities to repair the product, which would allow all, or parts, of it to be reused. Alternatively, a product could be dismantled and its constituent materials could be reused or recycled.

The variety of options for improving material efficiency, and the complexity of choosing between them, can make them unappealing to firms that are looking to reduce their GHG emissions.

The International Energy Agency has identified two further barriers. First, industries lack expertise on how to improve material efficiency. Second, cost structures and tax regimes often mean labour is more expensive than materials: firms are less likely to introduce material efficiency improvements if their employees take longer to manufacture a product.The reality is, without appropriate policy incentives, firms may continue to prioritize other GHG emission reduction strategies and overlook opportunities for material efficiency improvements. However, there remains scant policy interest in material efficiency as a GHG emissions reduction strategy: among EU countries, for example, improvements in material efficiency are mainly viewed as waste management and recycling strategies.2 So why is this the case and what can be done about it?

Country targets are focused on domestic GHG emissions

Many countries around the world have set targets to reduce their GHG emissions. Most of these country-level targets are focused on domestic emissions i.e. those generated within a country. For example, China, the world’s largest country-level emitter, intends to reduce the GHG emissions intensity of its economy by 60-65 per cent below 2005 levels by 2030.3 However, a focus on domestic emissions will ignore much of the potential reduction in emissions that material efficiency could deliver if those reductions happen abroad. Cars, for example, are traded internationally. If a country such as Australia - a large net importer of new cars - introduces policies that encourage its citizens to share cars or keep them for longer, there will be a reduction in car demand. Assuming this leads to a fall in car production, fewer GHG emissions will be generated. However, this won’t be recognized as a contribution to Australia’s climate change target.

Sectoral approaches to climate change policy

Most countries that participate in the regular UN climate change negotiations have developed sector-level action plans to help them meet their national targets. Germany, for example, has set goals for emissions reductions by 2030 in the buildings, transport and industry sectors.4 This sectoral approach encourages policymakers to focus on how materials and products are manufactured in each sector and whether this can be done in a way that generates fewer GHG emissions, for example, by introducing new technology or equipment. Identifying opportunities for material efficiency improvements requires a broader perspective that also considers how materials and products are used between sectors. There may be opportunities for ‘industrial symbiosis’ if, for example, scrap material from the production line in one sector can be used, instead of new material, as an input for another sector. There is therefore a risk that when policymakers focus their attention on individual sectors, opportunities to reduce GHG emissions across supply chains and product lifecycles are overlooked.

A lack of a common understanding of material efficiency opportunities

The European Environment Agency recently suggested that there is currently no uniform definition or even implicit understanding of ‘materials’ in EU policy documents and that most member states’ policies leave this term undefined. Without a common definition of materials, how can policymakers be expected to have a common understanding of material efficiency opportunities? There is therefore a risk that policymakers only view some, rather than all, of the strategies outlined as potential opportunities to reduce GHG emissions.

Technical challenges with tracing materials and GHG emissions

A key challenge for policymakers is that there is little data on GHG emissions associated with material use. Although a number of countries report the total mass of material that is used each year, there is little detail on which sectors are using what materials, where in the world these materials come from and what GHG emissions were generated during their production.

Moving from material to product supply chains involves even more complex calculations. A car, for example, comprises thousands of individually manufactured components that are made up of multiple materials, often produced in a global supply chain. Estimating these supply chain GHG emissions would be time-consuming and may require guesswork if there is no information about how and where components are made. This missing data is important. If policymakers do not know what GHG emissions are generated along a product supply chain, how can they assess the emission reductions from improvements in material efficiency?

Poor coordination among material efficiency advocates

The material efficiency strategies explained are not new. Many organizations have spent years promoting them as solutions for a circular economy. However these strategies are not always framed as a way to reduce GHG emissions and this affects how they’re perceived by policymakers. The European Commission, for example, viewed lower emissions as a ‘wider potential benefit’ of a circular economy rather than a primary driver.5 This demonstrates a broader challenge within sustainability: action to address one issue may impact other areas and these interactions between sustainability goals may not be fully understood or communicated.

Implementation also requires a change in how emission reductions are accounted for. Material efficiency opportunities may transcend national boundaries, as product supply chains are often international. Around a quarter of global GHG emissions are generated during the manufacturing of products that are then sold abroad. There needs to be a formal way of recognizing that action taken in one country (e.g. extending the life of a product) could lead to emissions reductions abroad (e.g. reducing demand for new material). Otherwise these emissions reduction opportunities may fall through the cracks. The current focus on domestic emissions targets offers little incentive to reduce the GHG emissions that are embodied in internationally-traded products and services.