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LONDON: A report by the UK's All-Party Parliamentary Sustainable Resource Group says Britain has the potential to expand its remanufacturing sector from £2.4 billion to £5.6 billion per year and has called on the government to set up a Centre of Excellence with a leading university to expand the practice.

In addition to creating thousands of skilled jobs, the study says remanufacturing or "reman" results in the reduction of CO2 emissions, resource use and water consumption and can be considered one element of the wider 'circular economy', where products and components are designed, made and reused.

caterpillar remanufacturingThe group of MPs, chaired by former Conservative party environment secretary Caroline Spelman, cites the example of the U.S. - the largest reman country in the world. Between 2009 and 2011, despite the Great Recession, the value of U.S. remanufacturing grew by 15 percent to over $43 billion and supported 180,000 full-time employees in over 70,000 companies.

According to a study by the Stuttgart-based Fraunhofer Institute, the annual cost-savings from worldwide remanufacturing would equal the electricity output of five nuclear power plants; leave 10.77 million barrels of oil in the ground for carbon capture; save enough raw materials to fill 155,000 railroad cars in a train 1,100 miles long; and reduce annual CO2 emissions by over 800,000 tonnes - roughly equivalent to one percent of the world's auto emissions.

The parliamentary study notes that remanufacturing also presents a strong business opportunity - possibly twice as profitable as OEM. "Using either a sales-based business model with slightly reduced prices or using a leasing model (where customers effectively pay the same price as for a new product) the competitive advantage for businesses is vast," it says.

However the members of the group warn that international trade conditions are a key barrier to encouraging the remanufacture of products: "Many countries such as Brazil, China and Russia do not have a set of standards that distinguish remanufactured products from used products so [they] cannot be imported. Remanufacturers may have to develop a plant in a particular country in order to sell products in that country. A commonly accepted global definition of remanufacturing would help overcome these trade barriers," they add.

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