General Motors turns to resource efficiency to alleviate regulatory ‘perfect storm’

Speaking at edie’s Resource Revolution Conference in London on Tuesday (5 July), GM’s CSR manager Ian Allen revealed how recycling and remanufacturing has already added around $1bn in revenue to the company’s bottom line, and has paved the way for a sector-wide push to create a “sustainable future” for the automotive industry.

“I think the car industry is going through a perfect storm in terms of Brexit and regulations,” Allen said. “We have approval regulations mixing with testing, emissions, air quality, safety and of course recycling. We’ll still have to comply with all of those regulations going forwards without being able to have any input towards them when we leave the European Union.

“But, if you can ingrain sustainability with business value then you’re onto a winner. Minimising waste adds to the bottom line which preserves a positive business case for reducing our resource footprint. It’s in our interests, and the entire industry’s interest, to nurture sectors which have grown up around the circular economy. We can’t see remanufactured or refurbished parts as a challenge to our business anymore, we have to embrace it and utilise it.”

Regulatory storm

Allen explained that GM’s conscious push to promote recycling and reuse, which sees the company only offer warranties on cars if it has a remanufactured part in it, had seen the revenues thrive, even though the regulatory landscape had added extra pressure on the car maker’s ability to manufacture.

The automotive industry as a whole is still reeling after a swathe of high-profile emissions and fuel economy scandals. On top of emissions testing and regulations, Allen revealed that the company was battling to promote resource efficiency while complying with safety regulations.

With the Ellen MacArthur Foundation valuing the circular economy at €1.8trn, GM has aligned its sustainability commitments to promote closed-loop models. Alongside a target to reduce waste produced by 10kg per vehicle by 2020, the company is also aiming to achieve a zero-waste to landfill status across 150 of its global sites.

GM recently revealed that all European Vauxhall sites, which it owns, are landfill free, while three out of the company’s four UK sites are also landfill free and 129 sites globally has also reached the milestone. Allen revealed that the UK headquarters will also achieve this milestone by the end of the year.

“Our customers are interested in how efficient their vehicles are during their ownership and how much fuel will it use while they drive it,” Allen added. “We have a lot of control over the manufacturing process and more control over recycling now.

“But we have safety requirements that limit the materials that we put into vehicles because they have to be rigid and pass crash rests and these are embedded in the manufacturing process. One of the challenges is the type of products we produce. We have 10,000 different parts going into our vehicles and we try to increase the amount of recycled parts because it makes life easier and less costly for us when we come to disposing the vehicle.”

Of the circa 10,000 individual parts that GM uses to build its vehicle portfolio, 95% have to be recyclable as part of new legislation that the company introduced in January 2015. New scrappage schemes, which have been adopted across the sector, are also improving resource efficiency with some suppliers creating financial incentives for consumers who trade in their old vehicles.

Technological horizons

Despite overcoming the regulatory burdens, Allen admitted that a new wave of technology had created more challenges for GM to overcome in the near future. For example, the “unstoppable” rise of electric vehicles (EV), which could represent one-third of all cars sales by 2040, has created a dilemma for GM in regards to lowering emissions while reducing waste.

While EV batteries are increasing in range, they can still weigh up to half a tonne. Considering GM’s 2020 10kg per vehicle waste reduction goal, this creates something of a balancing act. The company recently re-branded its Powertrain division to develop a purpose for end-of-life batteries that are otherwise too costly for GM to deal with in-house.

“New technology is shaping how we design vehicles,” Allen added. “Electrification is unstoppable and appears to be the way to reduce carbon emissions and tackle air quality while creating a sustainable future for the industry.

“But as remanufacturers we don’t particularly want EV batteries back to separate into reusable parts and minerals as its too costly. We need a new industry to grow up around end-of-life batteries.”

For Allen, these end-of-life markets could already exist, after revealing that energy storage systems – as already being used by Tesla – emergency back-up generators, and network stability models – currently being trialled in the UK by Nissan and the National Grid – are all avenues that could be explored in the future.

Matt Mace