By Liam Kilmister, Component Sense
This article originally appeared in the Jan/Feb issue of Procurement Pro.
Electronic waste (e-waste) often contains hazardous materials like lead, mercury, and brominated flame retardants (BFRs). These materials seep into the soil and environment when dumped in landfills. When burned (via smelting, for example), these chemicals can pollute the air.
Government e-waste policies, such as Waste Electrical and Electronic Equipment (WEEE), aim to minimise the unethical disposal of electronics. However, they are currently not proving enough to stem the growing e-waste crisis.
Electronic manufacturers, and procurement professionals are essential to reducing e-waste. One important lever that they can pull to drive meaningful change is utilising the electronics secondary market.
The world’s growing mountain of electronic waste (e-waste)
e-waste is the fastest-growing solid waste stream in the world [1]. In fact, 82 million tonnes of it is expected to be produced in 2030 [2]. Inside each electronic component present in e-waste are valuable rare earth elements (REEs) that require energy to extract from finite resources, in addition to toxic materials.
In 2024, Component Sense CEO and Founder, Kenny McGee, visited one of the world’s largest e-waste dumpsites. Agbogbloshie was a commercial district in Accra, Ghana where many locals informally recycled e-waste from the West. Here, workers burned e-waste in large bonfires.
While the government formally demolished the Agbogbloshie site in 2021, recycling, including burning, still takes place in pockets in and around the area. During Kenny’s time here, it highlighted not only the dangers of e-waste but also the scope of the global e-waste problem, which only grows yearly [3].
A secondary market circular solution
Although regulated recycling helps tackle e-waste, it is only part of the solution. Only 22.3% of e-waste in 2022 was formally documented as recycled [4], and even then, many current e-waste recycling practices require high amounts of energy to recover small amounts of REEs.
Given the worrying global e-waste trends and recycling challenges, it begs the question of why untouched electronic components in warehouses are simply labelled as surplus to requirements and disposed of daily. Generally, these unwanted parts are excess and obsolete (E&O) components that were either overforecasted or resulted from pivoting production priorities.
As it stands, a circular economy is often seen as a more effective solution to preventing e-waste. Instead of a typical linear supply chain model of take, make, and dispose of, a simplified circular supply chain follows a take, make, use, collect, refurbish, redistribute, and recycle system. In practice, circularity focuses on maximising the lifetime value of materials and keeping components in circulation so that they are used for what they were intended for and do not end up as waste.
The secondary (or grey) market is a key facilitator of circularity in the electronics sector. It enables the redistribution of E&O components that are surplus to production requirements.
The secondary market sometimes gets a bad reputation due to the presence of counterfeit components. However, component buyers can take steps to ensure they only deal with reputable and trusted buyers, like insisting on full traceability and a robust quality inspection process from sellers. These minor steps can make a big difference in preventing pristine, unused components from ending up as e-waste.
Why procurement professionals should go grey
The secondary market for electronic components is only continuing to grow in importance, with component buyers catching on to the many benefits of sourcing here, both sustainable and financial. Here are just some of the reasons why sourcing from the secondary market with trusted sellers is gaining in popularity:
- Prioritising the use of existing components keeps them out of landfill and reduces the need for new production. This, in turn, lowers the demand for virgin material extraction
- The secondary market is a valuable source for hard-to- find components that are unavailable through direct channels, potentially avoiding costly product redesigns
- Secondary market sellers often hold on to ‘legacy stock’ (components over 10 years old). These parts can potentially repair industrial or military machinery for many years to come, preventing the need for equipment to be scrapped
Conclusion
The electronics sector can no longer ignore the growing e-waste problem. Procurement experts can drive change by sourcing electronic components from the secondary market. This marketplace is legal and safe, provided buyers take steps to vet suppliers.
Trusting companies like Component Sense to purchase pristine, unused E&O components shows a commitment to sustainable practices and comes with other financial benefits. If the components you are looking for are present on the secondary market, it can make sense to choose these over buying new.
References
- https://www.who.int/newsroom/fact-sheets/detail/ electronic-waste-(e-waste)
- https://unitar.org/about/ news-stories/press/globale-waste-monitor-2024electronic-waste-rising-fivetimes-faster-documented-ewaste-recycling
- https://procurementpro.com/ do-you-know-where-your-ewaste-ends-up/
- https://ewastemonitor. info/the-global-e-wastemonitor-2024/
