3FOOD

Third Industrial Revolution Consulting Group
Simplified illustration of a circular economy
Source: EU (2014) Scoping study to identify potential circular economy actions, priority sectors, material flows &
value chains, prepared by PSI/IEEP/Bio/Ecologic, representation by, Patrick ten Brink, P Razzini, S. Withana and E.
van Dijl (IEEP), 2014, report funded by Environment’s Framework contract for economic analysis
ENV.F.1/FRA/2010/0044.
The Renault plant in Choisy-le-Roi outside Paris is a good example of circularity across a
company’s value chain. The Renault plant “remanufactures” automotive engines, transmissions,
injection pumps, and other parts for retail. The plant facilities use 80% less energy, 90% less
water, and generate 70% less oil and detergent waste in its operations than its competitors,
giving it higher operating margins.
Renault designs its parts to make them easier to disassemble and reuse. Renault also
collaborates in joint ventures with a steel recycler and waste management company to secure
the necessary expertise to optimize the lifecycle of their parts. Finally, Renault motivates its
suppliers to increase aggregate efficiencies and reduce waste in the supply chain by rewarding
them based on performance contracts – paying them for the efficiency gains – rather than
simply paying for the purchase of the goods.
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