What role can the circular economy play in Industry 4.0?

Combining productivity with sustainability

In broad terms, the circular economy consists in reducing waste and optimizing our use of resources. That definition seems made to please financial officers at major industrial groups. Here, economic goals and ecological concerns are in perfect alignment: consuming less is good for the planet and for the bottom line. That is why Industry 4.0 can be viewed as intrinsically eco-friendly and is already engaged in processes similar to those of the circular economy. The deployment of sensor networks and their resulting data flows, which are characteristic of Industry 4.0 and its digitalized factories, do indeed aim to optimize the use of materials and logistics infrastructures to achieve significant improvements in productivity and reduce their environmental footprint.

Reconciling recycling with cutting-edge production

But in stricter terms, the circular economy is also founded on the notion of giving a second life to products or their component materials. Within that meaning, if Industry 4.0 truly integrated circular economy principles, manufacturing would fully incorporate recycling at every stage of the production cycle. Building factories that are effective, innovative and capable of integrating recycled components is a real challenge — and one that calls for a healthy dose of imagination, since recycling and high performance are usually perceived to be incompatible.

Automakers leading the way

The auto industry has often been called out for its particularly damaging environmental impact, but these days, car manufacturers are on the front lines of this technological revolution. The PSA Group, for example, has created a business unit entirely devoted to the circular economy: it markets recycled and refurbished parts through several of the group's brands. Meanwhile, Renault is combining eco-designed vehicles (use of recycled materials, minimization of waste) with smart product end-of-life management, incorporating parts and materials from old cars into a new production cycle. The railway sector has also been doing its part. SNCF Réseau has set up networks to recover and upcycle equipment that used to be discarded: steel rails are reused when their degree of wear allows for it and ballast is reused after screening. Wooden railroad ties are incinerated to generate energy, while concrete crossties are crushed for use in road subsurfacing or for reclamation applications.

Integrating the circular economy in the economic models of the country's key industries requires a massive overhaul of how resources are used and of the internal organization at factories and the logistical circuits that connect them. The implementation of Industry 4.0 also calls for the same kind of in-depth makeover. Why not kill two birds with one stone? The digital infrastructures that will boost productivity in the 4.0 factory are sometimes seen through the lens of their considerable carbon footprint, but by also favoring the circular economy, they could well have a positive environmental impact.