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The second life of waste is a 30 billion euro business

Ref Ricerche's analysis proposes a further qualitative leap in the logic of the circular economy: managing waste and enhancing it even before it becomes waste, extending its life cycle. Here are estimates and opportunities offered by this new market

The second life of waste is a 30 billion euro business

The best way to manage waste is to prevent it from becoming waste. The proposal for a truly circular approach (i.e. regenerating or reusing a product even before its entire life cycle ends) comes from a reflection by the Ref Ricerche study centre, which analyzes the possibility of a leap in quality and a real own paradigm shift: a waste that will be recycled remains in fact a waste, it is thrown in a dumpster (special, hopefully), transported to the landfill, and then processed and reconverted. All these steps can be avoided by anticipating them. “At the top of the so-called “waste hierarchy” (and therefore among the preferable options) – explain the Ref scholars – reuse and preparation for reuse have so far not enjoyed much consideration. Placing themselves in a sort of "middle ground" between the world of waste and that of non-waste, they suffered from the lack of clear rules, lack of organizational and entrepreneurial skills, to end up relegated to the role of supporting actors".

Yet, in addition to the indisputable practical advantage of this approach, reuse or regeneration also creates the best conditions for, for example: incentivize innovation, helping to reduce the use of virgin raw materials; contribute to extend economic utility of products and services; generate employment and reposition skills and know-how towards alternative productions. Not to mention the environmental and economic benefits of the "second hand" market: the sale of used items reached 2019 billion euros in 24 (1,3% of GDP), of which 10,5 through the online, while according to the calculations of the Swedish Institute for Environmental Research (IVL) the purchases made on the Subito.it platform alone (one of the most used) in 2017 made it possible to avoid 4,5 million tons of CO2. Not only. The third-party second-hand market moves about 850 million euros a year and concerns about 3 stable initiatives, while the segment that employs the most people is that of the ambulant sector: a sector that is difficult to assess, which is sometimes only a hobby but which in the meantime involves around 50 micro-activities, with an estimated 80 employees.

A big boost could come from online trading. A recent survey by ISPRA has highlighted how only 24% of the Italian municipalities examined have flea markets, exchange points and/or reuse centres. A small and highly uneven share (concentrated in the North). On the other hand, they have been born and raised for decades giants of the online second-hand trade, such as eBay which is listed on the Nasdaq, but also the same social networks such as Facebook, which since 2016 has introduced a marketplace that involves all users. Among these innovative solutions there is also an Italian app, Depop, a peer-to-peer shopping platform founded in 2011 in the Veneto incubator H-Farm and which has now become British with headquarters in London. In addition to the resale, however, there is also the remanufacturing, or the repair, regeneration, actual renewal of the life cycle of a product that is no longer thrown away or resold as it is, but perhaps disassembled and reassembled: in this case the added value is the saving of raw materials, to the benefit of investing in a skilled workforce.

This is perhaps the most interesting challenge, because in addition to the environmental benefit and the possibility – as in reuse – of generating new commercial transactions (at a lower price for consumers), there is the creation of employment, considering that remanufacturing It is a highly labour-intensive business, which can allow for
recover part of the unemployment originating from the delocalization of production and automation. It is no coincidence that according to the scenarios reconstructed by the European Remanufacturing Network (ERN), remanufacturing fuels a market that is worth around 30 billion in Europe and that could grow to 100 billion by 2030, a volume already reached in the USA. In terms of sectors, the automotive and the industrial machine building sector each represent around 30% of the remanufacturing market, the rest is divided into 27% for electrical and electronic appliances, 7% for components for heavy and off-road vehicles and 3% both to aerospace and to technological supplies in general. ERN itself estimates that regeneration saves between 60 and 80% of the value of new products, especially in terms of lower costs of raw materials, energy, transport, distribution, etc.

In short, a really difficult opportunity not to be seized, but how to do it? The authors of the study delve into regulatory issues (there is in fact a difference between reuse, which pertains to waste, and repair or remanufactoring, which pertain to products), arguing that "the main levers that could favor the diffusion of prevention and reuse in Italy there are three: the new Action Plan for the Circular Economy, promoted by the EU Commission; the new National Waste Prevention Program, which the Minister for Ecological Transition Roberto Cingolani will have to draw up; and the ARERA regulation in the urban waste sector”. But in Italy a first step forward has already been taken: in the context of Industry 4.0, on 28 May 2020 the implementing decree of the Transition Plan 4.0 was approved by the MISE, which allocates a 10% tax credit to activities subject to technological innovation aimed at achieving ecological transition objectives.

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