As the world gears up for a net zero world, French car maker Renault is already in the recycling game. Clea Martinet, VP Group Sustainability — Sustainable Development at Renault Group spoke with Autocar Professional after the showcase of the new Scenic in Munich, Germany recently, which premiered with over 24 percent recycled materials.
Martinet said given India’s great entrepreneurial culture and the innovative spirit, there is huge scope for circularity in the country. India can be a role model for countries outside of Europe, given its own infrastructure, entrepreneurial culture and innovative spirit, with frugality at the core, she said. “If you create value at the end of life, you create economic interest. India is great for entrepreneurship. You are known worldwide for your innovation and entrepreneurship, and I’m sure of the boom in India. So that will also create a volume of end-of-life materials, end of life vehicles, that could be recycled and processed and create an industry and a local industry in India,” she added.
Martinet claims circularity is no more a buzz word for Renault, but a critical strategic pillar which has already created a dedicated entity around circularity called — Future is Neutral — whose sole business is circularity on the path to zero emission.
Future is Neutral started with a capital of Euro 500 million and it has been investing in small and mid-size companies in the circular economy industry. Set up in October of 2022, the entity ended with Euro 750 million in turnover, which is set to cross Euro 1 billion by the end of this year.
The long term objective of this new-age business is to reach a turnover of more than Euro two or three billion and an operating margin of more than 10 percent by 2030.
While many consider circularity as a CSR activity, it is a huge opportunity that can add to the bottom line. It is still a fancy word in many parts of the world, but it is only a matter of time, say experts, that circularity will pay rich dividends in the future. Martinet concurs, “We are at an early stage, it’s still a cost for now, but I think when we look back in 2030, we’ll say it was not a cost, it was an investment.”
Economic dynamism can drive circularity
On the prospects of India she said, given the car park, there is a huge margin of progress. “It could be awesome. There is a real economic dynamism in India. It could be a way of proving that carbon neutrality can be reached out of Europe too. So, I think India can be a role model for countries outside of Europe, for maybe showing the way of how we can reach a sustainable economy that is not the European way,” added Martinet.
The current focus of the entity is in Europe. It is based out of France and will further expand into Spain and Portugal. But one day, why not India, asks Martinet.
India needs to adopt a twin track to circularity.
The country needs to prioritise two things to ensure faster transition to net zero targets — first to invest in the recollection of old vehicles and the second is to invest in renewable energy in order to have impact, the head of Sustainability at Renault mentions.
The Government of India has come out with its Scrappage Policy in 2021 which states that commercial vehicles which are more than 15 years old and passenger vehicles more than 20 years old should be scrapped. The aim is to curb pollution, improve vehicle safety, create opportunity for replacement and thereby demand and finally create
a thriving recycling industry which will be critical for the future target of net zero by 2070, committed by the Government of India.
Already vehicle makers like Maruti Suzuki, Toyota, Mahindra & Mahindra and Tata Motors have started setting up recycling centres across the country. One of the key reasons for a healthy growth over the last few years was also due to the government’s new Scrappage Policy.
“I didn’t know that India incentivised scrappage. This is great because the main issue in terms of sustainability for India is that the electricity and the carbon footprint is really high. So when you sell an electric vehicle, in India, you lose the carbon footprint that you’ve gained.
She explained that given that the source of energy is thermal, for a B-segment car, the carbon footprint is likely to be the same for both ICE and EVs.
With circularity, you change the way you assemble the car, you change the way you consider the materials because you want them to keep their residual value high at the end of life. So the whole economic model gets transformed, she explained.
“So it’s great because it forces you to think about the lifecycle of your car. When you think ‘Oh I’m responsible for this end of life,’ automatically you change the way you can see the car, because you want to have value at the end of the value chain, you don’t want it to be a piece of junk,” she said.
The average age of cars in France is about nine to 10 years, it is much higher in India.
Today, a new vehicle contains only between 20 and 30 percent recycled materials from all industries. The entity ‘Future is Neutral’ will enable the automotive industry to significantly increase the proportion of recycled materials in the production of new vehicles. “The unit can offer a solid competitive edge for the future as the raw material prices are soaring through the roof and investing in this a way to shield ourselves from the soaring prices of virgin materials. Once the carbon taxation is coming up, the grey materials are soon going to be as expensive. So we need to anticipate,” said Martinet.
In a context of energy transition marked by the scarcity of resources and inflation in the price of raw materials, this entity will develop more technological and industrial solutions thanks to the expertise of its subsidiaries and its network of operating partners, claims the company.
“Our circularity approach is to move from car to car, it is cradle to cradle, it is really virtuous. Even more than that, you know, recollecting from the agro industry and from other industries will help in bridging the gap,” said Martinet. Renault’s ‘Future is Neutral’ subsidiary is looking at a battery recycling partner. She says Renault is not a chemist and recycling batteries is an expert’s job. “We will be announcing our recycling partner soon for the battery and that kind of further boosts our turnover,” she added. While the consciousness amongst the customers is still limited, economies are waking up to the circularity reality or a net zero world, Martinet says. “There is a great interest amongst the investment funds on anything that is going green, it is a common story across multiple funding roadshows that I have been a part of,” she said.
Every year in Europe, more than 11 million vehicles, made up of around 85 percent recyclable materials, reach the end of their life. However, this resource is under-exploited. New vehicles are made up of only 20-30 percent of recycled material, from all industries. Today, the recyclable material from end-of-life vehicles is mostly recovered for other industrial applications (metallurgy, construction, etc.) The objective of Future is Neutral is to maintain the value of parts and materials for as long as possible and to enable the industry to achieve a much higher rate of recycled automotive materials in the production of new vehicles.
The company’s strength lies in its ability to mobilise a network of subsidiaries and partners to collect parts, materials and batteries throughout the automotive lifecycle, from scrap cars, factory rejects and garages. Thanks to this ecosystem, The Future is Neutral is developing circular economy loops at each stage of a vehicle’s life, from the production phase to the use and end of life of vehicles. In concrete terms, The Future Is Neutral relies on its subsidiary Gaia, whose battery repair, parts collection and reuse, and recycling of materials from end-of-life vehicles (ELVs) are based in Flins.
Also located at the heart of the Flins Refactory, the renovation of mechanical and mechatronic parts, as well as the future vehicle dismantling line, aim to supply these circular flows. With its partner Suez, the entity also owns two companies: Indra, the leader in ELV treatment in France, with more than 370 approved centres, and Boone Comenor, an expert in the recycling of metal scraps from industry.
Alongside industrial partners, Future is Neutral aims at becoming a future European leader in closed-loop battery recycling. To develop Europe’s first closed-loop battery recycling offer, the entity relies on Europe’s largest fleet of electric vehicles, high-content chemistry and capitalises on Indra’s expanding network to assist in battery collection and Gaia’s expertise in battery diagnosis. Finally, the entity will also work with its battery manufacturer partners, such as Verkor, to pool their end-of-life batteries with production waste.
The entity also offers the automotive industry a consultancy service, as well as training dedicated to the circular economy, with the support of the Circular Mobility Industry (ICM) campus based in Flins, as part of the group’s ReKnow University.
This article was first published in Autocar Professional’s December 15, 2023 issue.