According to Circle Economy, 93.1% of materials entering the global economy today still come from virgin sources, writes By Erich Labuda, President, Motion Services Division, ABB.

The economic cost of that dependency runs deep: roughly €25.4 trillion in value is destroyed each year by linear material use – close to 31% of global GDP.

What the data show isn’t merely an environmental concern – it’s a systemic flaw in how industries create and capture value.

Industries are consuming resources faster than they can be recuperated. The pressure this creates on critical raw material supply chains, energy costs, and operational continuity is something every manufacturer and asset operator will feel acutely in the years ahead. The question is whether your organization is positioned to turn it into advantage, or whether it will become a liability you’re forced to address later.

Circularity starts at design – and runs the full lifecycle

Too many industrial operators still treat capital equipment as a commodity purchase, evaluated on acquisition cost and headline efficiency ratings alone. Circularity, in this framing, becomes an afterthought – something to consider when equipment reaches end of life, rather than a principle that shapes every decision in between.

But the circular value of an industrial asset is set long before it leaves the factory floor. Take motors and drives, for instance – the beating hearts of industry. Industrial electric motor systems account for around 60% of global industrial electricity demand and are typically engineered to last 20 to 30 years. When engineered with modularity, repairability, and upgrade pathways built in, they can evolve alongside customer needs – rather than being replaced prematurely. Motors designed without magnets or rare earth materials reduce energy use and maintenance demands while cutting exposure to volatile, geopolitically sensitive supply chains. In one case, a record-setting motor ABB produced for a steel plant reached 99.13% efficiency and is projected to save an estimated 61 GWh of energy over its 25-year lifespan. That is circularity expressed through design.

Motors, drives, compressors, and pump systems are long-life infrastructure assets. The materials specified, the service intervals observed, and the upgrade decisions made across years of operation all determine how much value an asset retains – and how much is lost. Embedding circular principles from design through to procurement, operation, and recovery: that is where competitive advantage is built.

Circularity is competitive strategy

Circularity at industrial scale requires alignment across the value chain – between suppliers, equipment designers and manufacturers, operators, service partners, and policymakers. Regulatory frameworks like the EU’s Circular Economy Act have a critical role to play: incentivizing durable design and harmonising the rules that govern material recovery.

But organisations that wait for regulation to force the issue will find themselves behind those who have already embedded circularity into procurement decisions, asset management strategies, and capital planning.

The Circular Edge in practice

ABB’s approach means improving performance and profitability today while building a leaner, more resilient operation for tomorrow. That means products engineered from the outset to reduce material and energy use; lifecycle services that keep assets performing at their best through maintenance, diagnostics, and targeted modernization; and take-back and recycling programs that close the loop at end of life. Circularity is a principle that runs through every stage of how we design, deliver, and support industrial equipment – not a single lever pulled at one point in an asset’s life.

Material and economic value creation at end-of-life is part of that picture. Through ABB Motion’s Take-Back and Recycling Programme, Novelis – a leading sustainable aluminium producer – recovered old powertrain components at its Swiss operations, with up to 99.4% of materials recyclable through specialized processes. No waste went to landfill. That kind of closed-loop outcome is only possible when recovery is built into the product design and service model from the start.

When circularity is embedded across every step of a machine’s life – from design and procurement to end-of-life recovery – the gains are measurable: lower operating costs, greater resilience to supply chain disruption, and equipment that keeps delivering value long after a commodity purchase would have been discarded.

Where do we go from here?

Life-cycle asset management must be recognised as a genuine circular strategy – not a stopgap between replacements, and not a niche sustainability program. Whether the decision is a new purchase, a modernization, or an end-of-life recovery plan, the discipline is the same: evaluate it over the full lifetime, not just the upfront investment.

The organizations embedding this thinking into procurement and asset management now are building the operational resilience and competitive advantage that holds up in a world of finite resources and uncertain supply chains.

Learn more https://www.abb.com/global/en

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