Closing the loop on the circular economy

Published by the Ellen MacArthur Foundation, "A New Dynamic 2: Effective Systems In a Circular Economy" brings together 18 key thinkers, business leaders and academics who look beyond the boundaries of their respective disciplines and establish the necessary connections to re-think our current development path. This volume helps to further understand and engage in the realization of the circular economy model.

What is remanufacturing? What are its additional economic or environmental benefits, and how does this industrial practice differ from reuse or recycling? This adapted chapter, "Remanufacturing and the circular economy," answers these questions with compelling case studies that illustrate the power of the circular economy model. This study brings an important focus to a topic that holds great promise for contributing to the global adoption of a regenerative economy.



Remanufacturing (or "reman") is a truly closed-loop industrial process that intentionally recaptures the value-added component of a product so that it may lead additional useful lives rather than being landfilled or recycled.


The cornerstone of reman is full restoration — a high-quality process through which products are systematically disassembled, cleaned and inspected for wear and degradation. Any substandard or degraded components are replaced, feature upgrades can be incorporated and the product is reassembled.


A New Dynamic 2 book cover

Quality testing is typically performed to ensure performance meets original specifications. At the end of the process, the remanufactured item emerges functionally equivalent to new production, and often it is supported post-sale with the same kind and length of warranty coverage as a newly manufactured product.

Remanufacturing is often compared with recycling, even though the two processes differ significantly. Recycling reduces products into raw material, which can then be used again. In contrast, remanufacturing retains the geometrical shape of the product, and is therefore able to capture both the materials and the value added (the labor, energy and manufacturing processes) which were embodied in the original product during initial manufacturing. In many cases, the ratio of total energy required for new production compared to that required for remanufacturing is approximately 6:1.


Research found that a typical reman operation (diesel engine cylinder head remanufacturing) required less energy and produced fewer greenhouse gas emissions than new production of the same component. Recapturing and retaining the value-added component of a product is both environmentally and economically beneficial.


By implementing a remanufacturing strategy, disposal costs — both financial and environmental — can be avoided, the value embodied in the product can be recouped and resources can be used more efficiently, thus helping advance the circular economy model.