Optimizing Lifespan of Circular Products: A Generic Dynamic Programming Approach for Energy-Using Products

Abstract

Slowing down replacement cycles to reduce resource depletion and prevent waste generation is a promising path toward a circular economy (CE). However, an obligation to longevity only sometimes makes sense. It could sometimes even backfire if one focuses exclusively on material resource efficiency measures of the production phase and neglects implications on the use phase. The (environmental) lifespan of circular products should, therefore, be optimized, not maximized, considering all life cycle phases. In this paper, a generic method for determining the optimal environmental lifespan (OEL) of energy-using products (EuPs) in a CE is developed, allowing the simultaneous inclusion of various replacement options and lifetime extension processes, like re-manufacturing, in the assessment. A dynamic programming approach is used to minimize the cumulative environmental impact or costs over a specific time horizon, which allows considering an unordered sequence of replacement decisions with various sets of products. The method further accounts for technology improvement as well as efficiency degradation due to usage and a dynamic energy supply over the use phase. To illustrate the application, the OEL of gas heating appliances in Germany is calculated considering newly evolved products and re-manufactured products as replacement options. The case-study results show that with an average heat demand of a dwelling in Germany, the OEL is just 7 years for climate change impacts and 11 years for the aggregated environmental indicator, ReCiPeendpoint(total). If efficiency degradation during use is considered, the OEL for both environmental impact assessment methods even lowers to 1 year. Products are frequently replaced with re-manufactured products to completely restore efficiency at low investment cost, resulting in higher savings potential. This not only implies that an early replacement before the product breaks down is recommended but also that it is essential to maintain the system and, thus, to prevent potential efficiency degradation. The results for cost optimization, as well as currently observed lifespans, vary considerably from this.