A Business Model-LCA of turbochargers Comparing BorgWarner remanufacturing and traditional manufacturing business models

Abstract

This study explores whether remanufacturing turbochargers in the automotive industry can help decouple economic growth from environmental impact. The principle is to reuse older components and minimize the need for parts made of virgin raw materials. While remanufacturing reduces material consumption, it also introduces additional processes and reverse logistics. To evaluate these trade-offs, the study compares two business models: remanufacturing (REMAN) and traditional manufacturing (business as usual, BAU). Rather than using a conventional product-level life cycle assessment (LCA), the analysis employs the Business Model Life Cycle Assessment (BM-LCA) method to assess environmental performance at the business model level, analyzing both materials and financial flows in combination. The results show that REMAN outperforms BAU environmentally, with significant reductions in raw material use, particularly of critical materials, and overall environmental performance. For example, titanium use, the most critical metal assessed, decreased by 70.8%, and global warming potential was reduced by 44%. These environmental benefits were not offset by the added processes in REMAN, nor did they compromise economic performance. A sensitivity analysis revealed that production in Poland currently results in the highest global warming potential compared to four other potential locations, provided that comparable profitability is maintained. The study supports remanufacturing as a viable circular economy (CE) strategy that improves environmental performance while maintaining profitability. The findings suggest that, for this case, remanufacturing can contribute to decoupling economic value creation from environmental harm, offering a competitive advantage for companies committed to sustainable industrial practices.