Lessons
from
Lego

We don’t need to drop recycled materials. We do need to learn from lego case.

With the recent news from Lego falling like a brick in the sustainability pond, we are seeing too many quick reactions aiming to say: recycled materials are to be dropped.

We feel there is a need to take a step back, dive a bit more into the details of a complex decision in order to help companies take informed, meaningful and action-oriented learnings from that Lego case.

Let’s start with a reminder of the context

Last Monday, the Lego Group announced their decision to discontinue the use of recycled PET in their production chain. This article analyzes this announcement and the role of recycling in corporate decarbonization.

Lego is the world’s largest toy manufacturer, but their business model heavily relies on petroleum, with “billions of pieces” manufactured from 80% petroleum-derived ABS (acrylonitrile butadiene styrene) every year (Novethic, 2023). As a result, 1 kg of plastic requires around 2 kg of oil, raising concerns about the sustainability of their production system, especially in light of Lego’s goal to reduce its greenhouse gas emissions by 37% by 2032 compared to 2019 levels (Libération, 2023; Novethic, 2023)..

In response, Lego had announced in 2021 that they would turn to the integration of recycled polyethylene terephthalate (rPET) for production. However, last Monday, Niels Christiansen, CEO of the group, revealed that this choice resulted in higher carbon emissions “over the product’s lifetime.” This revelation echoes concerns about the quantitative role of recycling as a decarbonization solution and, more broadly, in reducing the environmental impact of businesses.

Does recycling significantly reduce emissions?

Recycling is a “valorization operation” that involves treating waste into substances, materials, or products for their initial or other purposes (INSEE, 2021). This action involves industrial transformation processes, and there are two ways for a company to increase its recycling rate: (1) through a closed loop by reintroducing its waste to reuse the raw materials and create new products, or (2) through an open loop by taking waste flows from other entities (Huysman et al., 2015).

It’s interesting to note that rPET largely comes from the beverage sector (Libération, 2022). Thus, the strategy adopted by Lego and many other companies looking to incorporate recycled plastic into their production chain depends on an open circular loop model. In other words, plastic waste produced by this sector is captured and recycled for use by another sector looking to reduce its impact.

What Lego’s results show us is not only the limitation of using rPET in recycling loops but also the complexity of recycling as a decarbonization solution.

The points to be drawn from this announcement are as follows:

1. Need for a case-by-case approach Not all materials have the same characteristics, and therefore, not the same industrial processes. Each material has a different environmental impact, as does its recycled equivalent. In essence, just because it’s recycled doesn’t mean it’s environmentally friendly. We need to quantify the impact and differentiate between different materials. For example, a study by FEDEREC and ADEME concludes that recycled cardboard emits more than virgin cardboard in Europe due to the use of renewable energy (biomass) to power this industry. Other studies emphasize that recycled aluminum, for example, emits 93% fewer emissions, making it a much less emitting material than its virgin version (FEDEREC et ADEME, 2017: 6). The solution is to quantify the impact by conducting carbon assessments, such as life cycle analyses (LCA) – which is what Lego did.
2. Beware of potential rebound effects! In Lego’s case, differences in material properties would lead to increased emissions from larger industrial processes required to obtain a product with similar properties. The softer nature of rPET compared to the ABS initially used in Lego production meant that other materials had to be added, leading to an increase in energy use and, consequently, final emissions. The need to replace certain production lines would also participate to the larger final footprint of the new materials. In essence, the potential emission benefits are offset by new necessary steps. The use of virgin materials in plastic recycling processes is common, limiting its overall benefits (The Conversation, 2018).

However, even though recycling, such as rPET, can generate higher or equal emissions to the virgin material it substitutes, we need to go beyond the “carbon tunnel vision.”

1. Look beyond emissions: a systemic and holistic vision is needed. There are planetary boundaries to consider. We must preserve natural resources for the sake of our economy and humanity.
2. Conduct life cycle assessments (LCA) to have this vision: WDNR studies 9 categories for a comprehensive LCA and evaluates their potential trade-offs. Global Warming Potential (GWP): Measures CO2 equivalent emissions throughout the product’s life cycle, including raw material extraction, production, transportation, and end-of-life management. Water Use and Water Footprint: Estimates freshwater usage, water pollution, and the volume of water required to dilute pollutants to safe levels. Eutrophication Potential: Quantifies the potential for nutrient runoff, often from agricultural processes, to cause excessive algae growth in water bodies. Acidification Potential: Measures the potential of emissions like sulfur dioxide and nitrogen oxides to cause acid rain. Ozone Depletion Potential (ODP): Measures the potential of certain chemicals to deplete the ozone layer. Energy Use: Quantifies total energy consumed throughout the product’s life cycle, including energy used in raw material extraction, production, transportation, and disposal (kWh). Resource Depletion: Measures the consumption of non-renewable resources, such as minerals and fossil fuels, throughout the product’s life cycle. Land Use: Quantifies the amount of land used for raw material production. Waste Generation: Estimates the total quantity of waste generated throughout the product’s life cycle.

WHAT TO DO WHEN THE IMPACT OF RECYCLED MATERIAL IS HIGHER THAN THAT OF VIRGIN MATERIAL? WHAT STRATEGIES SHOULD COMPANIES ADOPT TO REDUCE THEIR IMPACT?

There is clear need for businesses and entreprises to develop a robust and comprehensive circular economy strategy.

The importance of recycling in circular economy strategies has been criticized in many studies (Ghisellini et al., 2016; Ortega Alvarado et al., 2021) despite this concept encompassing several other actions, better known as the 4R notion: Reduce, Reuse, Recycle, Recover (Kirchherr et al., 2017).

• The concept of cascading loops (McArthur) is supported by various organizations, including the McArthur Foundation, which emphasizes principles such as: Short loops: The shorter the loop, the more efficient the strategy. Optimization: Extending the lifespan of products. Cascade: Operating in a cascading manner to diversify product reuse throughout the value chain, following the Rs in order.
• The notion of cascading loops is increasingly endorsed by different experts. Thus, we understand that recycling represents a final technical solution after upstream efforts.
• “The best waste is the one that is not produced.” It is necessary to work on product longevity: increase their lifespan and reuse existing ones, thus avoiding emissions related to industrial and manufacturing processes.
• These circular economy strategies can reduce impact: repair and reuse before addressing product recyclability to ensure end-of-life product management.
• These circular economy strategies will have a deeper impact on businesses and directly affect their business models, transforming them to ensure their survival in a carbon-neutral world where natural resources are becoming scarcer.

WE ARE HERE TO HELP

At WDNR, we can help you at several level on that matter:

• With our TRANSITION pillar, we can help you efficiently measure, create and activate your reduction and adaptation strategies to ensure you are making the right and holistic choices to reduce your impact on the Planet and start a crucial step of your business transformation
• With our REINVENTION pillar, we can help you transition from a linear to a circular model, with a data driven approach to guarantee you choose the right path(s) for your business to transform and be fit for a warming world.