Karelia University of Applied Sciences

International Business

Circular Economy of Refurbished

Smartphones in the European
Union
Research on Drivers and Barriers

Petri Hapuli
Ville Kumpulainen

Thesis, May 2023

 THESIS
May 2023
Degree Programme in International Business

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Authors
Petri Hapuli, Ville Kumpulainen

Title
Circular Economy of Refurbished Smartphones in the European Union
Research on Drivers and Barriers

Abstract

The European Union is dedicated to achieving a transition towards a circular economy

influenced by various factors, including policies, manufacturers, and consumer attitudes
towards circular products. The linear economic model's environmental impacts and the
increasing costs of finite raw materials have led to the circular economic model's
growing appeal. However, this transition presents both opportunities and challenges for
businesses and governments.

Through a narrative literature review, this thesis investigates the drivers and barriers to
the circular economy of refurbished smartphones. The research synthesizes current
knowledge on the subject and analyses the supporting and impeding factors for
refurbishing smartphones in the European Union.

The authors identified 11 drivers and 21 barriers to the circular economy of refurbished
smartphones. The drivers and barriers were categorized under three themes, which are
legislation and policies, manufacturing and infrastructure, and consumer behaviour. The
findings reveal that these factors are highly interconnected, and a holistic approach
involving policies and stakeholder collaboration is necessary to promote the transition to
a circular economy of refurbished smartphones.

Language Pages 74
English

Keywords
circular economy, refurbishing, smartphone, european union, drivers, barriers
Contents

1 Introduction ................................................................................................... 4
2 Theoretical background ................................................................................ 5
2.1 Linear economy .................................................................................. 5
2.2 Circular economy ................................................................................ 7
2.2.1 Value retention ................................................................................... 9
2.2.2 Circular economy of smartphones .................................................... 12
2.3 Sustainability .................................................................................... 13
2.3.1 Sustainable business opportunities ................................................... 14
2.3.2 Electronic waste ............................................................................... 15
2.4 Consumer behaviour ........................................................................ 17
2.5 Legislation and policies ..................................................................... 18
3 Purpose of the thesis .................................................................................. 22
4 Literature review as a research method ...................................................... 22
5 Data collection ............................................................................................ 26
6 Synthesis .................................................................................................... 30
6.1 Legislation and policies ..................................................................... 30
6.1.1 Holistic policy approach .................................................................... 30
6.1.2 Taxation ............................................................................................ 33
6.1.3 Ecodesign ......................................................................................... 35
6.1.4 Social aspects .................................................................................. 37
6.1.5 Corporate responsibility .................................................................... 39
6.1.6 Intellectual property rights ................................................................. 40
6.2 Manufacturing and infrastructure ...................................................... 41
6.2.1 Collection .......................................................................................... 41
6.2.2 Production ........................................................................................ 44
6.2.3 Product design .................................................................................. 45
6.2.4 Cannibalisation ................................................................................. 46
6.2.5 Brand image ..................................................................................... 46
6.3 Consumer behaviour ........................................................................ 47
6.3.1 Product knowledge ........................................................................... 48
6.3.2 Quality knowledge ............................................................................ 48
6.3.3 Cost knowledge ................................................................................ 50
6.3.4 Convenience ..................................................................................... 51
6.3.5 Obsolescence ................................................................................... 51
6.3.6 Demographics .................................................................................. 52
7 Findings ...................................................................................................... 53
7.1 EU demonstrates strong commitment to circular economy ............... 54
7.2 Cost effective products attract customers ......................................... 54
7.3 Communicating product quality to consumers can increase perceived
value ................................................................................................. 56
7.4 Insufficient policies hinder circular practices ..................................... 57
7.5 Lack of knowledge impedes refurbishing .......................................... 57
7.6 Administrative costs pose challenges for refurbishing ....................... 58
7.7 Manufacturers obstruct refurbishing .................................................. 59
7.8 Refurbished products cannibalise new sales .................................... 60
7.9 Consumers have a negative perception of refurbishing products ...... 61
8 Discussion and conclusions ........................................................................ 61
9 References ................................................................................................. 69
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1 Introduction

The industrial economy has retained its largely unchanged economic model of
linear consumption of resources since the inception of industrialization.
However, there has been a recent realization among companies and business
leaders regarding the risks associated with this model, particularly in terms of
increasing demand for raw materials and the unpredictability and rising costs of
the supply. As a result, the circular economic model has emerged as an
attractive alternative. (Ellen Macarthur Foundation 2013, 6.)

Value retention of raw materials, products and energy are fundamental aspects
of the circular economy. A value chain that is deliberately designed to enable
the reuse, repair, and disassembly of products into raw materials for future use
is critical to achieving this goal. (Kumar, Garza-Reyes & Khan 2021, 1.) Despite
the potential benefits of a circular economy, several challenges impede its
implementation. These obstacles include imprecise definitions of key terms,
insufficient information sharing across the value chain, inadequate consumer
knowledge, and a lack of systems to facilitate reuse and refurbishment.
(Schumacher & Green 2022, 7; Boyer, Hunka & Whalen 2021, 1).

The rapid pace of technological progress has resulted in shortened product life
cycles and increasingly intricate and compact designs, rendering them more
challenging to disassemble and repair (Guide 2015; Mohammad & Shokouhyar
2021, 1; Schumacher & Green 2022, 9). Smartphones exhibit a low recycling
rate, with a significant proportion being retained in households or disposed of in
landfills (Singh, Duan, Yin, Song & Li 2018, 1-2).

The European Union (EU) and the United Nations (UN) share a common goal of
sustainable development. The EU has incorporated the 2030 Agenda for
Sustainable Development into its strategies by promoting a shift towards a
circular economy (European Commission 2023f). Companies adhering to a
linear economic model may encounter various restrictions and challenges,
hence necessitating adaptation to new conditions.
 5

This thesis employs a narrative literature review methodology to investigate the

circular economy of smartphones in the EU. The primary objective of the
literature review is to identify and analyse factors that support or hinder the
refurbishing of smartphones in the EU. The study aims to synthesize and
present a comprehensive understanding of the current state of knowledge on
the topic, while offering a critical discussion of the key issues involved. This
research is expected to benefit businesses, organizations, and future research
related to refurbished smartphones in the EU. The chosen research topic is
motivated by the authors' interest in the contemporary trend of transitioning to a
circular economy in the EU and the relatively limited research on the circular
economy of refurbished smartphones. This study addresses the research
question, "What are the drivers and barriers to the circular economy of
refurbished smartphones in the European Union?"

2 Theoretical background

The theoretical background of this thesis concentrates on the essential

concepts that influence and are associated with the circular economy of
smartphones in the EU. This section showcases the drawbacks of the linear
economic model and introduces the circular economic model and its practices.
The background further encompasses the exploration of sustainability and
resource scarcity, as well as an analysis of consumer behaviour. Additionally,
legislation and policies that have an impact on the circular economy and
refurbishing of smartphones are presented.

2.1 Linear economy

The linear economy is a model that involves a sequential flow of activities

(Figure 1), beginning with the extraction of natural resources (take), followed by
the production of goods (make), their consumption by end-users (use), and
concluding with their disposal after their useful life has ended (dispose). In this
economic model, resources are considered to be infinite and readily available
for exploitation, while waste generation is seen as an unavoidable by-product of
 6

economic activity. (Marino & Pariso 2016, 270-271; Schumacher & Green 2022,
1; Andrews 2015, 305.)

Take Make Use Waste

Figure 1. Linear economy model that follows the path from extracting the
resources to disposing the product. Adapted from Marino and Pariso (2016,
271).

Linear economy gained popularity during periods of prosperity, particularly in

developed countries where rich individuals were inclined to dispose of goods
when they were no longer needed. In contrast, the less wealthy segments of
society resorted to reusing and repairing items to meet their needs. This trend
was observed during the 1920s and 1950s. However, resource rationing during
World War II prompted the adoption of repairing and reusing practices across all
segments of society that continued shortly after the war. During the 1960s, the
linear economy gained momentum due to the significant transformations in the
global markets. This shift resulted in decreased economic incentives to recycle
metals, paper, glass, and textiles. Consequently, the product design did not
prioritize disassembly. (Andrews 2015, 307.)

Organizations that persist in following linear economy model in their business

operations are confronted with numerous obstacles. Previously presumed
inexhaustible resources are gradually becoming scarce, while the increasing
popularity of environmentally friendly trends is influencing consumers'
purchasing behaviours. Failure to adapt to these changing circumstances could
result in reduced profits, loss of customers, and exclusion from particular
markets. Therefore, it is widely accepted that companies must modify their
practices to remain competitive and sustainable. (Ramkumar et al. 2018, 7.)

As the global population expands and the demand for goods grows, there will
be an elevated need for resources which will potentially result in shortages and
escalating prices. By 2050, around 70% of the global population will live in
urban areas. This is a problem since urban residents generate twice as much
waste compared to the residents living in rural areas. (Andrews 2015, 307.) The
 7

supply chain and production processes may be impacted by these dynamics,

ultimately affecting the profitability of companies that rely on a linear economy
(Ramkumar et al. 2018, 8-9; Andrews 2015, 308).

Price volatility can be caused by a variety of factors, such as changes in supply

and demand, economic or geopolitical events, shifts in investor sentiment, and
changes in interest rates or inflation. It can affect both buyers and sellers of
assets, as sudden and large fluctuations in price can lead to unexpected gains
or losses. Price volatility has increased rapidly during the first decade of the 21st
century and refurbishing smartphones can be seen as one of the ways to
mitigate it. (Ellen Macarthur Foundation 2013, 18-19, 44.)

Moving to a circular economy may require significant investments in new

technology, processes, and infrastructure. Companies that fail to make these
investments can find themselves at a competitive disadvantage, as their
competitors may be able to operate more efficiently and sustainably. This
competitive disadvantage refers to a situation in which a company is at a
disadvantage relative to its competitors in terms of factors such as product
quality, values, brand, or distribution. As a result, it can become more
challenging for the company to compete effectively in the market and achieve
its strategic goals. (Spacey 2016; WBCSD 2022.)

2.2 Circular economy

The circular economy is a system that is designed to be restorative and

regenerative, with the aim of eliminating waste through the better design of
materials, products, systems, and business models. This system replaces the
traditional linear economy model with a closed-loop model that focuses on
restoration and regeneration. The core principle of the circular economy is to
design out waste and optimize products for a cycle of disassembly and reuse.
Unlike the traditional linear economy model, where products are designed for
disposal at the end of their useful life, products in the circular economy are
designed to be disassembled and their components reused. This approach
aims to eliminate waste and conserve resources, while also reducing the
environmental impact of manufacturing. (Ellen Macarthur Foundation 2013, 7.)
 8

Similarly, Kirchherr, Reike and Hekkert (2017, 1) suggest that the circular
economy is primarily associated with the principles of reuse, recycling, material
reduction, and product life extension.

The circular economy also emphasizes the use of renewable energy sources to
power the cycle of production and consumption. By reducing reliance on finite
resources and transitioning to renewable energy sources, the circular economy
aims to increase system resilience and reduce the environmental impact of
industrial processes. (Ellen Macarthur Foundation 2013, 7; Kumar et al. 2021,
1.)

Figure 2 illustrates the various stages a product goes through and the multiple
uses throughout its life cycle. A smartphone, for instance, goes through the
same first stages as in linear economy from raw materials to parts
manufacturers, product manufacturing, providers of the product, and finally to
the user. In linear economy, the typical next step would be either recycling or
more commonly being sent directly to landfill. Instead of being recycled or sent
to landfill after the initial use, in the circular economy the product would be
maintained through repair to extend its usefulness, reused by giving or selling it,
then refurbished or remanufactured to prolong its usage at the end-of-life, and
finally recycled into raw materials once it can no longer be used. (Ellen
Macarthur Foundation 2013, 22-24, 41-44.) Therefore, in a circular economy,
the value of products is attempted to be prolonged through various value
retention processes.
 9

Figure 2. The circular economy as a system to maintain materials in circulation.

Adapted from Ellen Macarthur Foundation (2013, 25).

2.2.1 Value retention

In a circular economy, the value retention process involves keeping products,

materials, and resources in use for as long as possible. This means designing
products with durability and repairability in mind, using recycled and renewable
materials, and adopting a closed-loop approach to production and consumption.
(United Nations Environment Programme & International Resource Panel 2018,
33.)

Reike, Vermeulen & Wijes (2018) conducted a literature analysis on the topic of
circular economy and value retention options. Their findings reveal a lack of
consistency among authors regarding the use of R-imperatives (re-words such
as re-assemble, recover, reduce, reuse, recycle). The range of R-imperatives
utilized by authors varied from 3Rs to 10Rs. Furthermore, the order and logic of
the R-imperatives differed among the studies reviewed. For example, some
authors referred to the 3Rs as “reuse, remanufacture and recycle,” while others
 10

referred to them as “reuse, recycle, and return.” These discrepancies in

terminology and classification highlight the need for greater standardization and
clarity in the language used to describe value retention options in the context of
circular economy. (Reike et al. 2018, 253.) For the sake of clarity, this thesis will
present the same set of 4Rs as the EU uses, including Reduce, Reuse,
Recycle, and Recover (Directive 2008/98/EC). The 4Rs are further defined in
the following list.

1. Reduce: The first step is to minimize the usage of resources and the
generation of waste. This can be achieved by implementing energy-
efficient and material-efficient practices, and by designing products that
are durable and long-lasting.

2. Reuse: To avoid waste, it is important to find new uses for products or

materials that may no longer be needed for their original purpose. This
includes direct reuse, repair, reconditioning, refurbishing, and
remanufacturing.

3. Recycle: Recycling involves collecting and processing materials that

have reached the end of their useful life and transforming them into new
products. This can help reduce the amount of waste going to landfills and
preserve valuable resources.

4. Recover: Recovering valuable materials and energy from waste streams

that cannot be reused or recycled is an important step towards
sustainability. This can be achieved through waste-to-energy conversion,
composting, and biogas production, among other practices. (Reike et al.
2018; Jawahir & Bradley 2016.)

Figure 3 displays a comparative analysis of the various reuse options,

highlighting their differences in terms of cost, energy consumption, warranty,
performance, and work content. This visual representation illustrates the
additional resources required by a company when comparing different reuse
options. Notably, remanufacturing exhibits the highest demand from these
terms and reuse the lowest. (Gharfalkar, Ali & Hillier 2016, 6.)
 11

Figure 3. A higher level of re-factor typically means higher warranty,

performance, work conducted, cost, and energy usage during the process.
Adapted from Gharfalkar et al. (2016, 6).

Direct reuse is the process of extending the life of a product or component by

using it again for its original purpose without any further processing or
modification (European Remanufacturing Council 2023, 4). This can include, for
example, selling or giving the product to another person who continues using it.

Repairing means that the product or component is restored to a usable

condition, extending its life and value, and avoiding the need for disposal or
replacement (European Remanufacturing Council 2023, 2). Repair includes
practices such as replacing a broken smartphone screen or faulty battery to
restore the functionality of the device.

Reconditioning is the process of restoring the product or component to an

acceptable condition. Therefore, it does not need to match the quality of a new
product, and the upgrade is minimal. (Gharfalkar et al. 2016, 6.)

Refurbishing is fixing a returned product back to “like new” condition. It means

that the product is disassembled and all the broken or worn components are
 12

replaced. After refurbishing the product is repackaged and put back on sale.
Refurbishing is a way to give products a longer lifespan. (Abbey, Meloy,
Blackburn & Guide, 2015, 26; Mohammad & Shokouhyar 2021, 1.) Varied
approaches to refurbishment may be employed depending on the nature of the
product. These may include only cleaning the product or parts, or cleaning in
conjunction with replacement of some of the components. Regardless of the
approach, certain obligatory procedures must be undertaken during
refurbishment, including the deletion of data, conformity testing, and functional
testing. Additionally, the refurbishment process may encompass optional perks
such as warranty, customer service, and post-sale support. (Fangeat et al.
2022.)

Remanufacturing refers to the procedure of restoring a previously used product

to its initial performance specifications and offering a warranty that matches or
surpasses that of a newly manufactured product. By implementing
remanufacturing techniques, additional value can be created for existing
products. Furthermore, it has been observed that this process can generate
cost savings ranging from 30% to 50% when compared to manufacturing new
products. (European Remanufacturing Council 2023, 2.)

2.2.2 Circular economy of smartphones

Technological advancements pose significant challenges for repair and

refurbishment as everyday tech items are becoming increasingly complex,
compact, and integrated. The disassembly of these products without the
requisite information is often challenging, if not impossible. The availability of
service manuals, parts, software, and tools is typically considered proprietary
and limited to the manufacturer or authorized vendors, rendering third-party
repair and refurbishment difficult. (Schumacher & Green 2022, 9.)

The rapid advancements in technology and the increasing demand for

smartphones have led to a short lifespan for these devices, rendering them
obsolete within a few years of use. As a result, the disposal of used phones has
become a serious environmental challenge, with a considerable amount of
electronic waste ending up in landfills. Refurbishing, as a method of generating
 13

more value from used phones that have reached the end of their useful life can
be seen as a potential solution to this problem. (Abbey et al. 2015, 26;
Mohammad & Shokouhyar 2021, 1.)

The mobile phone market has experienced significant growth on a global scale
over the past decade, with smartphone ownership nearly doubling from 2012 to
2015, reaching close to two billion by the end of 2015. In the EU, mobile phone
ownership is widespread, with over 90% of adults owning a device. While
smartphones add up to majority of mobile phones, ownership rates vary among
different countries. (European Economic and Social Committee 2019, 11.)

The growth of the mobile phone market has correspondingly increased the
industry's demand for precious metals such as silver, gold, and platinum. These
metals are essential components in the production of smartphones due to their
electrical conductivity. The recycling rate of smartphones is generally low due to
being stored at home for possible future use or improper disposal in waste bins,
from which they eventually end up in landfills. (Singh et al. 2018,1-2.)

2.3 Sustainability

In 1984, the UN established an autonomous panel called the World

Commission on Environment and Development to identify long-term
environmental strategies for the global community. The report, titled Our
Common Future, is the leading advancement to include sustainable
development into global politics. (Elliott 2012, 8.) The report defined sustainable
development as “development that meets the needs of the present without
compromising the ability of future generations to meet their own needs” (WCED
1987, 43).

The three circles model explains the interdependence of the economy,

environment, and society in achieving sustainability. The conventional view as
seen in Figure 4 considers the three as separate but equal, with the economy
having more power in decision-making, leading to negative consequences such
as pollution treated as externalities. The model on the right emphasizes that the
economy is an element of society and that society, in turn, relies on the
 14

environment. This indicates that economic activities occur within a complex web
of social connections. The same model is used in the European Sustainability
Competence Framework to visualize the interconnectivity of the three elements.
(Cato 2009, 37; Bianchi, Pisiotis, Cabrera & Giraldez 2022, 20.)

Figure 4. The traditional way of presenting the linkages between environment,

economy, and society versus the more recent model with superior explanation
of the interconnectivity. Adapted from Cato (2009, 37) and Bianchi et al. (2022,
20).

To achieve sustainability, businesses must integrate the previously mentioned

three elements of sustainability. A sustainable business must prioritize social
responsibility and avoid causing harm to the environment while generating
profit. Thus, profit-making should not come at the expense of social and
environmental sustainability. Achieving sustainability requires a comprehensive
approach that encompasses all aspects of a business, from operations to
supply chain management and stakeholder engagement. (Maryville University
2023.)

2.3.1 Sustainable business opportunities

Accenture conducted a study to evaluate the performance of 2540 publicly

listed companies based on their sustainability and trust, innovation, and
 15

financial performance. The study discovered that companies exhibiting strong

sustainability and trust, along with innovation, surpass their competitors in the
industry. These companies achieved operating profits 3.1% higher than their
peers and delivered more returns to shareholders. On the other hand,
companies that focus solely on innovation without adequately addressing
sustainability and trust showed minimal impact on their operating performance.
(Shook, Lacy, Monck & Dutton 2020, 11.)

Similarly, a report by McKinsey supports this finding, indicating that companies

that consider environmental, social, and political aspects see higher profits. The
report also lists several benefits of implementing ESG (environmental, social
and governance), including attracting more B2B and B2C customers with
sustainable products, reducing energy expenses, earning grants from
governments, attracting talent, boosting personnel motivation, and effectively
investing funds for long-term purposes, such as sustainable plants, which may
yield better returns. (Henisz, Koller & Nuttall 2020, 3-4.)

Swappie is a company that specialises in buying iPhones, refurbishing them,

and selling them with competitive prices and a 12-month warranty in both retail
stores and online. Circular economy and environmental values are at the core
of the company’s business model, and the fact is clearly highlighted in their
marketing and environmental impact reports. Swappie uses a 3+1R concept of
“reduce e-waste, reuse all functional spare parts, recycle generated waste, and
repair smartphones in house”. Swappie was founded in 2016 and has since
become to be one of the fastest growing companies in Europe. (Swappie 2021.)

2.3.2 Electronic waste

The amount of electronic waste (e-waste) generated globally has been

increasing, reaching 53.6 million metric tons (Mt) in 2019, of which only 17.4%
was officially collected and properly recycled. While recycling efforts have
grown by 1.8 million Mt since 2014, the total e-waste generation has increased
by 9.2 million Mt, indicating that recycling activities are not keeping pace with e-
waste growth. By 2030 the globally generated e-waste is expected to reach
74.7 million Mt, equivalent to an average of 9 kg per capita. (Forti, Baldé, Kuehr
 16

& Bel 2020, 13.) E-waste is currently one of the EU’s fastest growing waste
streams (European Parliament 2023).

According to global statistics, Asia produces the largest quantity of electronic

waste, with a staggering 24.9 million Mt, followed by the Americas with 13.1
million Mt, and Europe with 12 million Mt. Conversely, Africa and Oceania
generate the smallest amount of electronic waste, with only 2.9 million Mt and
0.7 million Mt, respectively. Despite Asia's prominent position in electronic
waste generation, the per capita production stands at a modest 5.6 kilograms,
in contrast to Europe's substantially higher per capita production rate of 16.2
kilograms. (Forti et al. 2020, 25.)

In 2022, the demand for gold reached a notable 4740.8 Mt, marking a
substantial 18.15% increase from the previous year. The jewellery industry
accounts for the largest proportion of this demand, representing 55.34% of the
total. Nevertheless, the technology sector's demand remains significant,
accounting for 8.21% of the total demand. (Statista 2023a; Statista 2023b.)

Over the last two decades, the cost of metals has experienced an upward trend.
This trend can be attributed, in part, to the escalating costs of extraction. The
depletion of existing mines, which were once more readily exploitable, has
necessitated the adoption of more costly mining methods. Moreover, the
discovery of new mines has also incurred significant expenses, particularly
given their occurrence in regions that are characterized by high degrees of
political risk, as well as geological and regulatory complexities. (McKinsey
Global Institute 2013, 20-21.)

From a resource management perspective, e-waste can be regarded as a form

of resource mining whereby valuable materials and metals are extracted from
discarded electronics instead of being mined from the earth's crust. The
recovery of metals such as copper, aluminium, and iron from electronic waste
represents an effective means of resource conservation. An example of the
environmental benefits of metal recovery can be observed in the carbon dioxide
savings of approximately 15 million Mt that were achieved in 2019. (Forti et al.
2020,15.) To further illustrate the benefits, an iPhone is estimated to contain
0,034 grams of gold, 0,34 grams of silver, and 0,015 grams of palladium. In
 17

comparative terms, a kilogram of discarded iPhones has 300 times more gold
than a kilogram of unprocessed gold ore. (Nogrady 2016.)

The relatively short duration of mobile phone usage when compared to other
electronic products has emerged as a significant concern. Specifically,
developing countries have an average mobile phone usage duration of three
years, while developed countries display even shorter usage periods, typically
less than two years. The main factors of this trend are attributed to rapid
technological advancements and the high market demand for newer features
and designs, rendering mobile phones obsolete before their expected functional
lifespan. (Soo & Doolan 2014, 1.) Consequently, mobile phones have emerged
as one of the fastest-growing waste streams worldwide (Singh et al. 2018, 2).

2.4 Consumer behaviour

Customers are growing more aware of environmental issues and are becoming
more mindful of the impact that their buying decisions can have on the
environment. Corporations that are perceived to be responsible for
environmental issues may face harm to their reputation, which could potentially
affect their sales and customer retention. (Emmer 2021; Ramkumar et al. 2018,
12.)

Consumer behaviour relates to the cognitive and behavioural actions

undertaken by individuals or households in response to recognizing their needs.
This encompasses the process of need recognition, which is followed by
product or service research, decision-making regarding the purchase, and later
post-purchase behaviours. Through analysis of consumer behaviour,
companies can gain a better understanding of their customers. This
understanding can help them to tailor their marketing mix to achieve greater
customer satisfaction, increase sales, and ultimately boost profits. By studying
their customers' needs and purchasing behaviours, companies can make
informed decisions regarding product development, pricing, advertising, and
distribution strategies, with the aim of meeting their customers' demands more
effectively. (Kumra 2007, 2-5.)
 18

The Recommerce 2022 Barometer shows that among the eight surveyed
European countries, the percentage of individuals who have previously owned a
reconditioned or second-hand phone ranged from 31-59%, with an average of
41%. Notably, previous ownership was higher among 16-34-year-olds, ranging
from 36-67%, with an average of 49%. Results from the survey indicate that
individuals are more inclined to purchase a reconditioned or second-hand
phone via the internet, and from a professional seller, as opposed to a private
individual. The barometer identified four primary factors that influence
individuals to purchase phones from a professional seller: price, promotion of
reuse/recycling, warranty, and obtaining a higher-end model. Price was the
most influential factor, while the other factors varied depending on the country.
However, on average, the second most important reason for purchasing a
phone from a professional seller was to promote reuse/recycling, while warranty
and obtaining a higher-end model were equally important as the third and fourth
most significant factors. (Recommerce Group 2022.)

2.5 Legislation and policies

The EU and the UN are aligned in their objectives for a sustainable future. In
September 2015, the EU along with numerous countries worldwide, signed the
2030 Agenda for Sustainable Development, a global action plan adopted by the
UN to eradicate poverty, protect the planet, and promote collective peace and
prosperity. The 2030 Agenda for Sustainable Development in conjunction with
The Paris Agreement, a climate change treaty, form a global framework for
addressing climate change and advancing towards a circular economy.
(European Commission 2023f; United Nations 2015; United Nations 2023b.)
Numerous policies and strategies are based on these agreements, so
understanding the big picture is essential to comprehending the driving factors
to a circular economy.

The 2030 agenda consists of 17 interconnected Sustainability Development

Goals (SDGs), which participating countries will implement within their own
policies and programs. The SDGs cover a wide range of topics, with goals 12
and 13 being most relevant to the topic of this thesis. Goal 12 of the agenda is
to guarantee sustainable consumption and production patterns. The goal also
 19

includes the objective of achieving sustainable management and efficient

utilization of natural resources, and significantly decreasing waste generation
through prevention, reduction, recycling, and reuse by 2030. Goal 13 mandates
prompt action to counteract the adverse effects of climate change, and it
includes a sub-goal of integrating measures to address climate change into
national policies, strategies, and planning. (United Nations 2023a.)

The European Green Deal is founded upon the aforementioned international

agreements and represents the most recent growth strategy of the EU, with the
overarching objective of transitioning the EU to a resource-efficient and
competitive economy. The goal of the Green Deal is to achieve net-zero
greenhouse gas emissions by 2050. It focuses on various sectors, such as
energy, transport, agriculture, and industry, to reduce waste and pollution,
promote the use of renewable resources, and encourage sustainable and
circular practices. (European Commission 2023b.)

A New Industrial Strategy for Europe represents a continuation of The

European Green Deal and it aims to enhance the competitiveness of the EU's
industrial sector while promoting its transition towards a sustainable and digital
economy. The strategy acknowledges that this transition will require a
fundamental shift from a linear economy to a circular one, impacting various
aspects of the economy, society, and industry. While the strategy focuses on
the industry policies on a broader level, the European Commision has
developed a Circular Economy Action Plan to guide the transition to circular
economy. (European Commission 2020b.)

The Circular Economy Action Plan covers a wide range of issues such as
product design, circular economy processes, consumer empowerment, waste
prevention, and efficient usage of resources. In relation to electronics, the plan
has proposed several initiatives such as the Ecodesign for Sustainable
Products Regulation, a directive on a common charging solution, Waste
Electrical and Electronic Equipment directive (WEEE), and the right to repair
proposal. These initiatives aim to drive innovation towards sustainable design
practices, reduce waste, and promote the adoption of circular business models.
(European Commission 2023a; European Commission 2020a.)
 20

The Ecodesign for Sustainable Products Regulation is a legislative framework

that is used to set requirements for manufacturers and designers of product
performance and information. Requirements can be used for almost any
category of products, and the framework can be applied to a wide range of
requirements, such as durability, reusability, repairability, recycling, carbon
footprint, and energy efficiency. The regulation is aimed at encouraging
sustainable design practices and reducing the ecological footprint of products
across their entire life cycle. The working plan 2022-2024 covers new energy-
related categories of consumer electronics, such as smartphones and tablets.
(European Commission 2023c.)

The proposed common charging solution aims at introducing a standard that

requires all new handheld electronic devices to come with a USB-C port. The
harmonization of chargers under this standard would allow consumers to use
any charger with a consistent charging speed across devices regardless of the
brand of the charger. This would potentially reduce the number of chargers
produced, therefore lowering the amount of electronic waste generated. The
regulation is set to take effect in 2024, with laptops being included in the
standard from 2026. In addition, producers are required to provide visual and
written information about charging characteristics, so consumers can
understand whether their current chargers meet the requirements of a new
device. (European Commission 2023d.) This standard shows that the EU is
willing to place strict requirements on manufacturers to support the transition to
the circular economy, and the unification of different parts between products
can be seen as beneficial to the refurbishment industry.

The WEEE directive aims to reduce the amount of electrical and electronic
waste, to promote the efficient use of resources and the retrieval of raw
materials through reuse, recycling, and other forms of recovery, and to improve
the environmental performance of everyone involved in the life cycle of
electrical and electronic equipment. Furthermore, the directive serves to
reinforce the countries to combat illegal waste exports with greater
effectiveness by making disguising illegal shipments of WEEE more difficult.
The WEEE directive imposes certain obligations on member states with regards
to the proper handling and management of electrical and electronic waste. In
particular, the directive requires the separate collection of WEEE at high levels,
 21

due to the complex mixture of materials and hazardous substances present in

such waste. Furthermore, the directive mandates member states to promote
environmentally conscious production and design practices for electrical and
electronic equipment, in addition to encouraging cooperation between
producers and recyclers. (European Commission 2023g; Directive 2012/19/EU.)

The European Commission has also put forward a right to repair proposal for a
directive aimed at promoting cost-effective and easy repair to encourage
consumers to repair their products instead of replacing them. If the proposal is
passed, demand for repair services will increase, which will not only support the
repair sector but also encourage manufacturers to adopt more sustainable
business models. The main objective of the proposed directive is to ensure that
more products are repaired during the legal guarantee period while making it
easier for consumers to access affordable repair services for technically
repairable items such as smartphones, tablets, and vacuum cleaners. During
the legal guarantee period, sellers are obligated to provide repair services if the
cost of repair is less than that of replacing the product. The proposed directive
provides consumers with the right to demand repair services from producers for
products that are deemed technically repairable under EU law, even beyond the
expiration of the legal guarantee period. This measure is intended to guarantee
consumer access to repair services and promote the development of more
durable products by incentivizing manufacturers to prioritize longevity.
Additionally, producers have a responsibility to inform consumers which
products they are required to repair themselves. (European Commission
2023e.)

The directive includes the establishment of an online matchmaking repair

platform, a European repair information form, and a European quality standard
for repair services, all of which aim to promote the repair of products. The online
matchmaking repair platform intends to connect consumers with repairers and
sellers of refurbished products within their vicinity, thus simplifying the process
of finding repair services based on quality standards and location. The
European repair information form will be made available to consumers by
repairers, increasing transparency regarding repair conditions and pricing, and
facilitating easier comparison of repair offers. The European Quality Standard is
a voluntary standard open to all repairers across the EU, intended to enable
 22

consumers to identify repairers who commit to delivering high-quality repair

services. (European Commission 2023e.)

3 Purpose of the thesis

The purpose of this thesis is to investigate the landscape of the circular

economy in relation to the refurbished smartphone industry within the EU.
Specifically, the aim of the research is to identify the drivers and barriers
discussed in the current literature and associated with the refurbishing of
smartphones. The focus of the research is on factors that affect both
established companies and ones that consider initiating refurbishing practices.
By exploring the circular economy concept in the context of refurbished
smartphones, this study seeks to contribute to a better understanding of the
social, technological, and economic implications associated with the circular
economy and their effects on the refurbished smartphone market.

The research question is: What are the drivers and barriers to the circular
economy of refurbished smartphones in the European Union?

4 Literature review as a research method

The research of this thesis was conducted as a literature review, due to the
broad subject matter and scattered literature. A literature review is a research
methodology that involves the summarization of current literature on a particular
subject, using the latest available information (Basheer 2022). Its primary
objectives are to assess and evaluate the current theories while also generating
new ones (Salminen 2011, 3). In addition, a literature review aims to identify
gaps and issues within existing theories and to provide a historical perspective
on the topic (Salminen 2011, 3). It is important to recognize that a literature
review is not simply a collection of brief summaries, but rather a type of
research that investigates existing research. (Salminen 2011, 5.)
 23

A literature review is analytical by nature and is regarded as a mixed-methods

research approach that incorporates both qualitative and quantitative methods.
Regardless of the type of literature review, a rigorous and disciplined approach
is required in all stages of the process to generate reliable, sufficient, and
generalizable results. (Vilkka 2023, 10.) Several types of literature reviews exist,
such as narrative review, which is also known as a traditional review, integrative
review, systematic review, and meta-analysis (Salminen 2011, 6-9, 12).

This thesis adopted a narrative literature review approach which is not limited
by specific methodological requirements compared to other forms of literature
reviews. The narrative methodology was utilized to investigate the existing
knowledge on a subject, identify key concepts and connections between said
concepts. The narrative approach enables organization and consolidation of
fragmented information from multiple sources into a comprehensive and
coherent synthesis. The primary objective of a narrative review is to provide a
broad overview of the current knowledge and research on the subject, and to
identify research gaps for future investigations. Ultimately, the purpose of a
narrative literature review is to comprehend and present the phenomenon in a
logical and argumentative manner. (Kangasniemi et al. 2013, 293-295;
Salminen 2011, 7.)

The less rigid methodological guidelines of the narrative methodology allow for
a broader exploration of the subject, and the review process can be adjusted
based on the findings, which is not feasible with other review types (Salminen
2011, 7). This methodology is particularly suitable for subjects with scattered
literature (Kangasniemi et al. 2013, 295). Nonetheless, the narrative review
approach has some limitations, such as the possible inclusion of authors'
preconceptions, subjectivity in literature selection, and the fact that the process
does not generate quantitative data. However, some of these limitations can be
addressed by transparently documenting the literature selection criteria and
choices. (Vilkka 2023, 19.)

Kangasniemi et al. (2013) have outlined a systematic four-step approach for

conducting a narrative literature review, as illustrated by Figure 5. The process
commences with the formulation of a research question, followed by the
 24

selection of data, constructing a description of the research material, and finally

examining the results. While the process is composed of discrete steps, it is
important to note that there is often a necessary degree of overlap between
them. (Kangasniemi et al. 2013, 294.)

Formulating the research question

• Guides the process
• Incorporating the research question into a conceptual or
theoretical framework
• Aims to have a focused but sufficiently open research question

Data selection
• Guided by the research question
• Understanding of the suitability and sufficiency of the data
becomes clearer as the selection progresses
• The selection is either implicit or explicit

Constructing a description
•Begins during the data selection phase
•Descriptive answer to the presented research question
•Combining, comparing and synthesizing content
•Data-driven examination

Examination of the results

•Compilation of the key results
•Examination in relation to the wider context and in relation to ethical and
reliability issues

Figure 5. Narrative literature review methodology as a process. Figure adapted

from Kangasniemi et al. (2013, 294).

The first step involves formulating a research question that serves as a guiding
principle for the entire review process (Vilkka 2023, 36). To be effective, the
research question must strike a balance between specificity and
comprehensiveness, enabling in-depth examination of the topic while also
allowing for multiple perspectives to be considered. The research question
generally focuses on broad concepts and abstract themes or phenomena.
(Kangasniemi et al. 2013 294-295.)

The second step in conducting a narrative literature review is the selection of

the research materials. The selection of research materials and the quantity of
 25

materials required are determined by the research question, and the process
overlaps with analysis (Kangasniemi et al. 2013 295-296). When selecting
research materials, it is essential to consider how each original study
contributes to addressing the research question, what unique insights they
provide, and how they relate to other literature (Kangasniemi et al. 2013 295-
296). Justification should be provided for the criteria used in the selection of
literature and sources, including the reasoning behind the inclusion and
exclusion of certain types of literature or sources (Vilkka 2023, 10).

The search for appropriate research materials is commonly conducted using

scientific databases or through manual searches of scientific publications. While
recent studies may be prioritized in this process, the primary selection criterion
should be the relevance of the material to the research question being
addressed (Vilkka 2023, 29). According to Kagnasniemi et al. (2013), the
methodology for material selection can be either implicit or explicit. The latter of
the two was chosen as the methodology for this literature review. (Kangasniemi
et al. 2013, 295.)

The process of Kangasniemi et al.’s (2013) explicit selection of materials is

executed systematically based on the research question and guiding framework
of selection criteria. The selection criteria generally include considerations such
as keywords, the publication timeframe, and language. Despite the systemic
approach to the material selection of this method, the process is not restricted
to the criteria and may be subject to changes and exceptions based on the
significance of the content to the research question. (Kangasniemi et al. 2013,
295.)

In the third step, the research question is addressed through a qualitative

description of the phenomenon with the selected studies. However, the
objective is not merely to present the materials, but to compare, analyse the
strengths and limitations of the current knowledge, draw conclusions, and
create a synthesis from the assembled materials. The selected materials are
examined to identify the significant aspects of the phenomenon, which can be
organized into content-based segments, for instance, by category or theme.
(Kangasniemi et al. 2013, 296-297.)
 26

The final and the fourth stage in the research process entails a comprehensive
review and analysis of the results obtained. The examination involves an
evaluation of the reliability and ethics of the research methods employed, along
with a thorough analysis of the outcomes. The findings obtained from the
narrative literature review are summarised and compared to the broader
societal and theoretical context. This stage requires a critical assessment of the
research question, identification of future challenges, and considerations for
new research opportunities. Ultimately, this phase culminates in the
development of conclusive remarks regarding the research outcomes.
(Kangasniemi et al. 2013, 297.)

5 Data collection

Trusted electronic databases of academic texts were selected for material

selection to ensure the scholarly credibility of this literature review. The chosen
databases for the search are Science Direct, ProQuest Ebook Central and
Springer Link. These databases were identified as adequate by the authors
during the research on the knowledge base of this thesis. Science Direct
includes peer-reviewed articles published in scientific journals, Proquest Ebook
Central has ebooks, and Springer Link has a combination of both ebooks and
peer-reviewed journal articles. Other databases were considered, such as
Google Scholar and Ebsco, but their search tools were insufficient to narrow
down the search, in addition to the search results being too broad for the scope
of this study.

The data collection for this literature review was conducted according to the
explicit material selection method of Kangasniemi et al. (2013). In light of the
rapid advancements in technology, the prevailing market trends, and constantly
updating and changing directives, legislation and policies in the 21st century, the
main criteria for material selection were year of publication between 2018 to
2023, chosen keywords, open access, and English language. While the focus of
this review was on peer-reviewed material, non-peer-reviewed materials were
not excluded from the search to ensure a comprehensive evaluation and the
latest information on the subject matter. Exclusion criteria for materials are non-
 27

free access for Karelia University of Applied Sciences students and printed
material without online availability.

The keywords used for this literature review were chosen according to the
research question: “What are the drivers and barriers to circular economy of
refurbished smartphones in the European Union?”. The keywords were
smartphone, mobile phone, driver, drivers, barrier, barriers, refurbished,
refurbishing, and refurbishment. The term "European Union" was excluded as a
keyword to broaden the scope of the research and consider a wider range of
factors that may impact the topic at hand. In order to refine the focus of the
research and gather more specific sources related to smartphones, the
researchers chose to exclude the keyword "Circular Economy". It should be
noted that refurbishment is a concept that falls under the umbrella of circular
economy, and therefore articles obtained through the selected keywords are
likely to yield relevant information.

The following search query was constructed to retrieve relevant literature

"(smartphone OR mobile phone) AND (barrier? OR driver?) AND
(refurbish????)". The constructed search query was formulated to retrieve
relevant academic literature by using the Boolean operators "AND" and "OR" to
combine and specify search terms. Some keywords include question marks to
search for the exact term and with a possible suffix. Finally, the term
"refurbish????" was included to retrieve results that include the root term
"refurbish" with any combination of four additional characters. The same search
query was used for all three databases.

During preliminary research for the knowledge base of this study, the authors
observed that refurbishing is often mentioned, but typically not the main topic
discussed. However, the factors that influence reuse, repair, and
remanufacturing, can generally affect refurbishment as well. Therefore, articles
found with used keywords with focus on these topics are also included, and the
materials are analysed and discussed from the perspective of refurbishment.

In the first phase of material collection, the relevance of search results in

relation to the research question was assessed by examining the title, abstract,
introduction, and table of contents of potential materials. Materials that did not
 28

meet the established criteria for relevance were rejected. Table 1 shows that
Science Direct produced a total of 128 results, out of which 45 were deemed
potentially relevant and selected for further inspection. Proquest Ebook Central
yielded 146 results, of which only 10 were selected, and lastly from Springer
Link’s search results of 54, only 8 met the criteria for inclusion in the study.

During the second phase of the material selection process, the chosen
materials were skim-read to evaluate their relevance based on their actual
contents. Notes were taken during this phase of the themes found in the
literature to sort the materials accordingly for further reading. Any materials that
did not meet the established criteria for relevance were excluded from further
consideration. For instance, an article titled “Customizing Products through
Remanufacturing -Ideation of a Concept” concentrated on individualization in
remanufacturing to create new products and did not include relevant information
about refurbishment. As seen in Table 1, 29 sources out of 45 were chosen
from Science Direct, 4 out of 10 from ProQuest Ebook Central, and all 5 from
Springer Link.

The third and final phase of the material selection process entailed a thorough
reading of the selected sources, with a critical examination of their relevance to
the research question. To facilitate this process, the materials were sorted
according to the notes made during the second phase, which aided in
identifying relevant concepts. The outcome of this phase is depicted in Table 1,
where 22 out of 29 Science Direct sources, 1 out of 4 ProQuest Central
sources, and all 5 sources from Springer Link were deemed relevant, and thus
selected for this literature review.
 29

Database Search query Search Relevant Chosen for this

results/ sources literature review
Potential after skim- after full reading
sources reading
Science (smartphone 128/45 29 22
Direct OR mobile
phone) AND (
barrier? OR
driver?) AND
(refurbish????)
ProQuest (smartphone 146/10 4 1
Ebook OR mobile
Central phone) AND (
barrier? OR
driver?) AND
(refurbish????)
Springer (smartphone 54/8 5 5
Link OR mobile
phone) AND (
barrier? OR
driver?) AND
(refurbish????)
Table 1. Out of 328 search results 28 sources were chosen for this literature
review.

A total of 28 sources were selected for this study, consisting of 1 ebook and 27
articles. The ebook in question is a compilation of published articles, of which 4
were considered relevant and are cited individually in the text. Therefore, a total
of 31 articles were used in the study. The evaluation of the relevance of
materials continued throughout the writing process, and the parts deemed
inconsequential were discarded.

During the data collection process, the authors made notes about recurring
themes found in the selected literature. These were then discussed. The
analysis identified three main themes that influence the circular economy of
refurbished smartphones, namely legislation and policies, manufacturing and
 30

infrastructure, and consumer behaviour. The authors recognized that all aspects
discussed in the literature can be categorized under one of these themes.

6 Synthesis

This study employs a synthesis to summarise relevant information gathered

from literature on the circular economy of refurbished smartphones in the EU.
The literature is categorized into three themes that emerged during the data
collection phase of the study. The first theme, legislation and policies, includes
EU and government strategies, directives, regulations, policies, and initiatives.
The second theme, manufacturing and infrastructure, pertains to factors that
affect production, business, and infrastructure from a company's perspective.
The third and final theme, consumer behaviour, provides an overview of
literature on consumer attitudes and buying behaviour.

6.1 Legislation and policies

Legislation and policies were discussed to some extent in nine of the selected
sources. Six main topics emerged from the literature with relevance to circular
economy of smartphones in the EU. These topics include the importance of a
holistic policy mix approach, taxation, corporate accountability, Ecodesign,
social policies, and intellectual property rights.

6.1.1 Holistic policy approach

The circular economy policies of the EU demonstrate a technocentric approach

that prioritizes resource efficiency and technological advancements to foster
circularity (Friant, Vermeulen & Salomone 2021, 345). According to Santarius et
al. (2023, 3), the authors Kantabutra (2008) and Bengtsson et al. (2018) found
that the same description applies to the current political situation overall. Friant
et al. (2021) suggest that a significant proportion of the policies and targets
focus on enhancing the recycling of various waste materials and encouraging
 31

repair activities through updated Ecodesign regulations. However, the scope of

these regulations is limited to a narrow range of electronic products, and there
are no specific targets or performance indicators relating to repair activities
(Friant et al. 2021, 345).

Friant et al. (2021) found that the discourse and policies of the EU are
contradictory regarding the circular economy. Friant et al. (2021) further state
that similar observations have been made by Colombo et al. (2019), Fitch-Roy
et al. (2020), Knill et al. (2020), Lazarevic and Valve (2017), Pollex and
Lenschow (2018), Repo et al. (2018), Stegemann and Oss-ewaarde (2018),
and Völker et al. (2020), who suggest that the sustainability vision of the EU has
been weak due to eco-modernist discourses and policies that prioritize techno-
innovations, green growth, and competitiveness over reducing the EU's
ecological footprint. (Friant et al. 2021, 346.) In order for the EU to successfully
implement the Circular Economy Action Plan to unlock growth potential, create
jobs and separate economic growth from environmental degradation, numerous
targets and indicators would be required, from reducing waste generation,
material demand, ecological footprints and increasing the self-sufficiency of raw
materials (Friant et al. 2021, 347).

According to Milios (2021, 478), the European Commission has adopted a

holistic life cycle perspective in developing policy proposals that aim to address
issues related to production, consumption, and waste management. Friant et al.
(2021, 347) have identified shortcomings in the production life-cycle policies,
particularly the absence of specific targets for incorporating secondary materials
in products. Additionally, Friant et al. (2021) noted that Hartley et al. (2020)
stated that the creation of online platforms for circular goods throughout the EU
would benefit the use of circular products, recovered components and recycled
materials (Friant et al. 2023, 347.) It could be said that establishment of such a
system has the potential to enhance the accessibility of circular products,
including refurbished smartphones, to consumers. Furthermore, it could benefit
refurbishment operations through increased component availability.

While waste prevention programs are required to include options for high-value
retention policies, such as reduction, reuse, repair, upgradability, refurbishment,
and remanufacturing, no targets or obligations are in place. Therefore, the
 32

implementation of these aspects is the responsibility of member states. Strict

requirements have the potential to hinder single markets, and thus member
states may be reluctant to implement them. (Friant et al. 2021, 345-346.)
Additionally, Svensson-Hoglund, Russell, and Richter (2021, 2) argue that
governments need a deeper comprehension of the fundamental challenges and
opportunities associated with repair, as well as the potential governance
structures for the market, to facilitate the expansion of repair operations. While
Svensson-Hoglund et al. (2021, 2) focus on repair, it can be argued that the
same statement applies to refurbishment as well.

Friant et al. (2021) assert that Farmer (2020), Fitch-Roy et al. (2020), Homrich
et al. (2018), and Moraga et al. (2019) have criticized the waste management
aspect of EU policies concerning Directives 2008/98/EC on waste, Directive
94/62/EC on packaging and packaging waste, and Directive 1999/31/EC on the
landfill. The authors point out that these policies prioritize recycling rates instead
of promoting a transformation towards a model that emphasizes the reduction,
deceleration, localization, redistribution, and democratization of resource cycles.
(Friant et al. 2023, 345-346.) One could argue that the democratization and
redistribution of resource cycles could have a positive impact on the
refurbishment industry and waste management. This is because it would
provide an additional source of refurbished products or components, while also
reducing the amount of waste generated by ensuring that products are reused
and repurposed rather than discarded.

The transition to circular economy requires the European Commission to take a

holistic approach on regulations and policies (Milios 2021, 493; Russell & Nasr
2019, 18, Santarius et al. 2022, 5). Furthermore, Milios (2021) asserts that
implementing taxation by targeting specific cycle stages of materials individually
is a considerable challenge, and thus should be applied to wider fiscal policy to
counterbalance weaknesses and have a strong effect on purchasing decisions,
behaviour, and facilitate the transition to circular economy. The European
Commission (2020) states that the successful implementation of a holistic policy
approach aimed at promoting a circular economy requires careful consideration
of the socioeconomic context in which it is applied. It is crucial to account for the
potential impacts of the transition on companies that may experience market
share loss, reduced investment, or decreased customer base. In this regard,
 33

Wilts (2019) proposes that the policy mix should be tailored to support such
companies, enabling them to adopt measures that promote resource efficiency,
develop relevant skills, and create new employment opportunities. (Milios 2021,
492-494.)

With the European Commission’s vision for circular economy and its
implementation on a significant scale, the commission will have a substantial
impact on the interpretation and prospects of circularity both in Europe and
globally (Friant et al. 2021, 344). The transition to a circular economy is an
ongoing process, and the European Commission is continually introducing new
policies and regulations to facilitate this shift. However, these policies lack
cohesiveness, resulting in a degree of disconnect among them. A holistic policy
approach is needed to incorporate numerous aspects of policies, regulations,
and legislation to drive an efficient transition to circular economy. Even so, the
complex nature of economic interactions both within and between different
sectors of the economy may present significant difficulties (Milios 2021, 496).

6.1.2 Taxation

Taxation on raw materials can be motivated by both fiscal and environmental

factors. Nevertheless, according to Söderholm (2011, cited by Milios 2021),
environmental taxes are only considered as second-best policies for addressing
resources. This is due to various structural barriers related to their design,
implementation, administration, and limited effectiveness in signalling to
economic actors. As a result, resource taxes are applied selectively. (Milios
2021, 479-480.) According to Friant et al. (2021), the authors Antikainen et al.
(2018), Arnsperger and Bourg (2017), Lazarevic and Valve (2017), Stahel
(2010), and Von Weizsäcker and Wijkman (2017) found that the EU generally
incentivized the taxation of raw materials and set lower value added taxes on
recycled, repaired, refurbished, and remanufactured products. None of these
measures are however compulsory. More robust measures would be required
to shift fiscal policy towards taxing raw materials rather than labour to promote a
circular economy. (Friant et al. 2021, 347.) Milios (2021, 481) noted that Rizos
et al. (2016) found small and medium-sized enterprises to have a significant
 34

role in the transition to the circular economy, as refurbishment and repair

services are particularly labour-intensive.

According to Milios (2021, 481), the Circular Economy Action Plan COM (2015)
states that price of a product is a key factor in a consumer’s purchasing
decision. The authors of this thesis found that the results from Recommerce
2022 Barometer support this claim (Recommerce Group 2022). In order to
promote the reuse and repair of products and ensure that their prices reflect the
associated environmental costs, member states are urged to offer incentives
and utilize economic tools such as taxation (Milios 2021, 481). There are
multiple options for the implementation of taxation to support circularity, such as
a natural material tax and a material input tax. According to Milios (2021), the
authors Ekvall, Hirschinitz-Garbers, Eboli and Sniegocki (2016) and Eckermann
et al. (2015) have noted that one of the challenges associated with the
implementation of natural material tax is that in order to encourage resource-
efficient practices, the tax needs to be high in whichever part of the value chain
it is implemented. However, Baptist and Hepburn (2013, cited by Milios 2021,
486.) found that the practical implementation of a high tax may prove to be
exceedingly challenging. ()

Milios (2021) suggests an alternative approach of using a material input tax,

which would consider the resource inputs required during the initial manufacture
of a material without discriminating between domestic and imported sources.
Ekvall, Sundqvist, Hemström and Jensen (2014, cited by Milios 2021) assert
that material input taxes could reduce the use of materials by encouraging
technological innovation. Ekvall et al. (2014)) also claim that the possibility of
substitution of materials can be a negative effect from taxing a single material.
Stahel (2013) argues that input material tax could support the reuse industry
with a competitive advantage due to the increased manufacturing costs of new
products. (Milios 2021, 481, 487-488.)

Studies show the price difference between buying a new product and repairing
an old one increases the likelihood of consumers preferring repair services or
reuse options. Thus, a reduction in value added taxes and simultaneously an
increase in material input taxes would incentivise consumers to choose repair or
reuse services instead of buying new products. (Milios 2021, 437, 493.)
 35

Practical examples of such policies are lacking, but one such example from
Sweden was mentioned in the literature. Milios (2021, 481, 488) points out a
study by Almén et al. (2020), which shows that a tax reduction on repair
services from 25% to 12% in 2017 in the IT sector increased the number of
purchased repair services.

According to Milios (2021), Lokrantz (2019) states that governments could

motivate waste holders to choose reuse or repair options with waste
management taxes and fees. According to Milios and Dalhammar (2020), while
it may not always be feasible to repair or reuse an entire product, salvaging
components for repair and reuse can effectively minimize material waste.
(Milios 2021, 493). This would be beneficial to both refurbishment and repair
industries by making spare parts more available with lower prices.

6.1.3 Ecodesign

The current emphasis of Ecodesign regulations is on improving the repairability

and recyclability of products, which is being achieved through policies that
promote spare part availability and easy disassembly. However, the authors
contend that in order to adopt a holistic approach to Ecodesign directives, the
regulations must also incorporate other measures that facilitate other value-
retention processes. These measures include requirements for enhancing
product durability, multifunctionality, upgradeability, and modularity. (Friant et al.
2021, 347.) As reported by Svensson-Hoglund et al. (2021), the findings from
the International Resource Panel (2018) and Cooper (2005) concur with the
mentioned measures. However, instead of emphasizing modularity, these
sources highlight the importance of involving stakeholders in repair activities.
(Svensson-Hoglund et al. 2021, 1.)

Santarius (2022) asserts that Ecodesign policies should be aimed at addressing

the physical lifespan of electronic devices. This could be achieved by mandating
manufacturers to offer repair and upgrade services, as well as provide software
updates for the entire physical lifespan of the product. (Santarius 2022, 6.)
Friant et al. (2021) further explore potential policies that could be implemented
to enhance Ecodesign policies. These policies include requiring all hardware
 36

and software from discontinued products be made open-source and increasing

the minimum guarantee period from two years. Additionally, the authors note
that eco-design regulations are limited to large electronic products with
extended lifespans. (Friant et al. 2021, 347.) However, the authors of this thesis
found this information to be outdated, as smartphones and other consumer
electronics are now covered under the 2022-2024 working plan (European
Commission 2023c).

Chemical laws are also considered to be a barrier to the repair, collection, and
reuse of spare parts (Svensson-Hoglund et al. 2021, 10). As noted by
Svensson-Hoglund et al. (2021), reports from Technopolis Group et al. (2016)
and Dalhammar et al. (2020) show that the introduction of new chemical
regulations may prohibit the reintroduction of outdated products or components
into the market if they fail to adhere to contemporary standards. Deloitte et al.
(2020) argue that substance-based legislation results in amplified risks and
increased burden for the complete supply chain of new as well as reused
components. The European Parliament (2006) states that compliance with the
EU's REACH directive, which regulates the usage of multiple chemicals in
products, necessitates that manufacturers and importers of refurbished
components collect and report data on the chemical substances utilized in their
products, and the use of restricted chemicals can ultimately limit sales of a
product. This further escalates the administrative load on inventory tracking and
management. However, according to European Commission (2016), the EU’s
principle of product legislation, namely "repair as produced," generally indicates
that spare parts are excluded from newly implemented mandates and can be
produced and utilized provided they meet the legal requirements enforced
during their initial market entry (Svensson-Hoglund et al. 2021, 6, 10.)

Svensson-Hoglung (2021) asserts that governments have recognized planned

obsolescence as a significant concern, and different member states of the EU
have implemented various strategies to address this issue. The EU's Circular
Economy Action Plan and Ecodesign regulations include designing products for
reuse and repair as separate elements. According to Shahbazi (2019), design
for reuse and repair are two distinct strategies, and careful consideration of the
trade-offs between the two is necessary to effectively promote the extension of
product lifetimes. Another strategy to approach planned obsolescence is the
 37

implementation of increased warranties, which legally guarantee repairs in the

event of malfunctions. Currently, the EU's liability period is two years, but some
member states have already extended it, as reported by ECC-Net (2015).
Sweden, for instance, has prolonged the liability period to three years, while in
Finland, the period is equivalent to the expected lifetime of a product.
Furthermore, the French Parliament (2020) has introduced a law that extends
the legal guarantee when a product is repaired. (Svensson-Hoglund et al. 2021,
9-10).

According to Svensson-Hoglund et al. (2021), French Parliament (2015) reports

that France has criminalized planned obsolescence resulting from manufacturer
conduct. Le Figaro (2018) found that in 2018, accusations were made in France
that Apple deliberately slowed down old iPhone models as a sales strategy for
new products. Apple received a 25 million fine due to this investigation, as
stated by Direction generale de la concurrence (2020). Similarly, as noted by
the Italian Autorita Garante della Concorrenza e del Mercato AGCM (2018),
Apple and Samsung were subjected to fines in 2018 due to a firmware update
that resulted in malfunctions and the reduced functionality of phones. The
companies failed to inform their customers and provide proper instructions for
recovering full functionality, which was viewed as a strategy to encourage
product replacement with new models. Additionally, numerous similar lawsuits
have been filed against Apple in the United States. (Svensson-Hoglund et al.
2021, 10.) The durability of products is of significant advantage to the
smartphone refurbishment industry. Therefore, the decisive stance taken by
countries to address planned obsolescence in smartphone manufacturing
serves as an encouraging precedent for the refurbishment industry.

6.1.4 Social aspects

Parajuly, Fitzpatrick, Muldoon and Kuehr (2020, 6), Russel and Nasr (2019, 23)
and Friant et al. (2021, 346) found consideration of social aspects in EU policies
on circular economy as essential. Friant et al. (2021, 346) and Parajuly et al.
(2020, 6) argue that social aspects of the EU policies to drive the transition to
circular economy are lacking in this regard. Parajuly et al. (2020) claims that the
Circular Economy Action Plan recognises the need for public awareness
 38

campaigns to change behaviour but fails to address the psychological and

social aspects. The directives on WEEE and Ecodesign, which are regarded as
essential initiatives concerning electronic products, lack adequate consideration
for the inclusion of end-users in their scope. (Parajuly et al. 2020, 6.) A holistic
approach would have included a multitude of mandatory social targets, such as
job generation and consumption of products with socio-ecological certification
(Friant et al. 2021, 346). Despite the fact that behavioural elements have not
been the primary focus, they are gradually being incorporated into the policy-
making process. (Parajuly et al. 2020, 6).

Consumer knowledge is considered a significant market barrier for circular

products. Educating consumers about various types of value-retention
processes is crucial, given the current perception of product quality that does
not align with their actual quality. Trust of consumers is hindered due to an
abundance of misinformation, stories of bad experiences, and lack of quality
standards and certifications on value-retention processes. The enhancement of
consumer knowledge regarding the true quality of circular products can
increase their attractiveness and consumer trust, resulting in heightened
demand and lowered market barriers. (Russell & Nasr 2019, 23.) One solution
proposed by Russell and Nasr (2019, 23) and Milios (2021, 494) to overcome
this issue is the implementation of quality certifications for circular products. The
implementation of this system necessitates the involvement of both industry and
government. Governments are responsible for ensuring the protection of
consumer interests and safety, while industry can address these concerns by
establishing and adhering to standards and certifications that guarantee the
aforementioned assurances (Russell & Nasr 2019, 23). While quality standards
and certifications are not in place for circular products, the right to repair
proposal put forward in 2023 has a similar purpose for repair services, which
shows that policy makers have an interest in educating consumers about the
quality of circular goods and services.

The transition towards a circular economy is contingent on the modification of

the behaviour of structural actors. According to Parajuly et al. (2020), O'Rourke
and Lollo (2015) emphasize that both businesses and governments are integral
actors in this regard. Furthermore, Parajuly (2017) identifies the absence of
collaboration among stakeholders as a significant impediment to electronic
 39

product circularity within the EU. To alleviate the issue, proactive measures
from businesses and governments are essential in overcoming institutional
barriers such as inertia and bureaucracy. (Parajuly et al. 2020, 6.)

6.1.5 Corporate responsibility

According to ERN (2016), legislation has the potential to encourage companies

to employ reverse-logistics to recover end-of-life products by imposing penalties
or creating reputational risks for their customer base (Steinhilper & Butze 2019,
96). The extended producer responsibility legislation in the EU requires
producers to finance and organise the return of products for reuse and
recycling. Russell and Nasr (2019) state that the current system favours
recycling, even though the targets are jointly set for both. Spain has introduced
targets specifically for reuse, while France has taken a different approach by
establishing a repair fund with Extended Producer Responsibility legislation.
Additionally, some producer responsibility organizations are exploring new ways
to prepare items for the reuse and harvesting of spare parts, often collaborating
with other organizations, and granting third-party access to the waste stream
(Russell & Nasr 2019, 2). Despite the fact that there are multiple rather
disconnected approaches to return of end-of-life products inside the EU, third
party access to a waste stream can be seen as a potential business opportunity
for refurbishment companies. It could also indicate that governments and
organizations are willing to engage with businesses to make the system more
proficient and less wasteful.

Legislation overall has the possibility to mandate that companies take

responsibility for waste management, set limits on the amount of waste
generated, increase the use of recycled materials, and restrict the use and
handling of hazardous substances (Steinhilper & Butze 2019, 95-96). These
can be either a burden for the company, or can be turned into a business
opportunity by creating longer lasting products, and embracing reuse,
refurbishing, and remanufacturing processes.

Steinhilper and Butze (2019) also discuss the concept of corporate citizenship,
which is a set of practices that involve companies recognizing their impact on
 40

society and the environment. A company's recognition of the positive and

negative consequences of its products and operations is an important aspect of
corporate citizenship. Because public perception can greatly affect a company's
financial success, companies are often encouraged to take responsibility for the
impacts of their operations and products. By demonstrating their environmental
values to their customer base, companies can increase their market recognition.
As customer perceptions become continuously more intertwined with the
environmental performance of the company, the reuse and recycling of
materials can not only help to enhance the company's and its products’
reputations but also lead to energy and raw material savings. (Steinhilper &
Butze 2019, 96.)

6.1.6 Intellectual property rights

Svensson-Hoglund et al. (2021) found that intellectual property rights generally

allow the repair of products, but there are exceptions in intellectual property
laws that impede or prohibit the reconstruction of protected work. Patents can
be an impeding factor, since repairs are limited in terms of the scope of
allowable modifications, leading to wasteful practices by discouraging
comprehensive repairs. Pihlajarinne (2020) asserts that the interpretation of
intellectual property rights leans heavily towards property rights, thereby
undermining the interests of the circular economy. According to CJEU (2009a),
activities that are considered reconstructions or modifications violate the patents
issued for technical innovations in the EU. Regarding copyright law, End-User
License Agreements (EULAs) may also contain clauses to prohibit unauthorized
repair, disassembly, or the use of non-original equipment manufacturer parts.
Nevertheless, CJEU (2012a) states that this is only the case in the US, as EU
case law says that repair cannot be limited by contract. (Svensson-Hoglund et
al. 2021, 3-4.) Refurbishment can be seen in a similar light regarding Intellectual
property rights, as repairing a product is generally a part of the refurbishment
process.

As noted by Svensson-Hoglund et al. (2021), CJEU (2011), CJEU (2009b), and

CJEU (1997) convey that holders of trademarks may have the ability to prevent
the further commercialization of products, such as refurbished spare parts. This
 41

principle was demonstrated in a legal dispute in Norway, where an independent

repairer was accused of importing screens that had been refurbished and bore
the Apple logo. As per Norwegian Høgsterett (2020) and Norwegian Borgarting
Lagmannsrett (2019), ultimately both the Norwegian Court of Appeals and the
Supreme Court ruled that the spare parts were counterfeit, even though
refurbished spare parts generally consist of a combination of original and non-
original components. (Svensson-Hoglund et al. 2021, 4.) This a problematic
precedent for the refurbishment industry of smartphones regarding the import of
refurbished parts.

6.2 Manufacturing and infrastructure

During the course of the research, the authors identified five significant factors
related to the manufacturing and infrastructure theme. These factors include
collection, production, product design, cannibalisation, and brand image.
Notably, the analysis of 15 chosen sources yielded relevant information
regarding the possible drivers and barriers associated with these factors.

6.2.1 Collection

The process of manufacturing reuse products involves the remanufacturing or

refurbishing of existing products as well as the acquisition and utilization of their
components to create new, usable products. These used products and
components are also called cores. The primary advantage of remanufacturing
or refurbishing lies in the ability to offset resource costs by acquiring already
existing items. However, the successful implementation of such a process
hinges on the efficiency of the collection infrastructure. (Russel & Nasr 2019,
17-18.)

Inefficient collection infrastructure can hinder the acquisition of necessary cores

and impede the remanufacturing or refurbishing process. Thus, a
comprehensive and efficient system for collecting existing products and their
components is essential to meet the requirements for remanufacturing or
 42

refurbishing. Without such a system in place, the full potential of

remanufacturing and refurbishing in resource conservation and waste reduction
cannot be realized. Therefore, a strategic approach must be taken towards the
development and optimization of collection infrastructure to ensure the
successful implementation of the manufacturing reuse process. (Matsumoto
2019, 114.)

Collecting cores can be expensive for a company, especially if companies have

their own collection infrastructure. One way to share the costs of collecting
cores is to have shared collection infrastructure, such as extended producer
responsibility and e-waste diversion. The implementation of e-waste diversion
and extended producer responsibility has the potential to enhance the cost-
effectiveness and core collection for remanufacturing and refurbishing, making
these processes more financially attractive. The lack of quality and the number
of available cores can hinder companies’ willingness to enter the refurbishing
and remanufacturing industry. (Russell & Nasr 2019, 23-24, 50-51.) Companies
can have access to cores by having a take-back system in place. However,
Uhrenholt, Kristensen, Rincón, Jensen and Waehrens (2022) citing Sepúlveda-
Rojas and Benitez-Fuentes (2016) have pointed out that designing an
economically viable take-back system is a challenging task. Hvass and
Pederson (2019) further insist that there should be more research done in
designing better take-back systems. One way to impose a take-back system for
an organization is to offer consumers a rebate for returning products, as
explained by Hopkinson et al. (2018). (Uhrenholt et al. 2022, 1, 6.)

According to Cole et al.’s (2019) research, the collection of e-waste has

received criticism. This is primarily because e-waste is considered as "waste,"
and as a result, it is often handled without the necessary care to preserve the
quality of cores during the collection process. Interviews conducted by the
researchers indicated that the collection phase often damages the external
finish of the e-waste, resulting in more expensive refurbishment or
remanufacturing costs. Furthermore, the interviews revealed that the
categorization of e-waste as "waste" has significant implications for its
treatment. Specifically, e-waste is viewed primarily as a material to be recycled,
rather than as a resource that can be reused. Consequently, the collection of e-
 43

waste is often viewed through a narrow lens, with a focus on recycling rather
than on finding ways to extend the life of its components. (Cole et al. 2019, 7-8.)

In a study by Gunasekara, Robb, and Zhang (2023), the authors Zikopulos and
Tagaras (2015) assert that disassembly is the most accurate method to
determine the quality of collected cores, albeit an expensive one. However,
Hahler and Fleischmann (2017) propose an alternative approach to assess core
quality by paying a quality-dependent purchasing price, which shifts the cost of
sorting to the consumers, as noted by Ferguson and Souza (2010). Another
approach suggested by Mutha et al. (2016) is for companies to purchase all
used items available initially and then classify them based on their predicted
yield. Nevertheless, the accuracy of the proportions of different categories
obtained in this process may be uncertain, and the quality can only be assessed
during the sorting stage after acquisition. Taleizadeh and Sadeghi (2019)
suggest that technology, such as radio frequency identification, can be used to
acquire more information about the quality of the cores without the need for
disassembly. (Gunasekara et al. 2023, 14.)

Rabiu and Jaeger-Erben (2022, 10) reported that Khan et al.'s (2021) research
suggests that technology can enhance the efficiency of reuse processes.
Similarly, Andersen and Halse (2023, 6) referred to Wang and Wang's (2017)
work, which highlights the potential of product identification numbers for linking
life cycle information to products and enabling its efficient sharing. Alcayaga et
al. (2019, 630) reported on the findings by Gupta (2014) that products with
smart sensors could lower the risk involved in reusing products by improving the
predictability of reuse products.

Storing cores until they are utilized is a necessary requirement for the
processes of refurbishing and remanufacturing. Depending on the product being
refurbished or remanufactured, this can be expensive since electronic products
consist of multiple components, meaning the facilities for storing large amounts
of cores can be expensive. (Sundin 2019, 50.)
 44

6.2.2 Production

The incorporation of value retention processes into company’s operations can

lead to significant economic benefits. Firstly, by reducing the need for new
resources, companies can save costs and become more profitable. Secondly,
the savings that companies make can be passed on to consumers in the form of
lower priced products. This offers an opportunity for companies to reach new
customer segments that may not have been able to afford their products
previously. (Russel & Nasr 2019, 20-21.) In a study by Duber et al. (2023, 604)
one company that sells remanufactured electronic products explained how they
expanded to markets with lower purchasing power with remanufactured
products. Therefore, it could be said that selling reuse products can open new
business possibilities in new customer segments.

According to Matsumoto (2019) the authors Parker et al. (2015) stated how the
original equipment manufacturers (OEM) might limit the information available for
non-OEMs making remanufacturing or refurbishing challenging. Besides
withholding information, the OEMs have an advantage against non-OEMs since
they control the product designs, systems and distribution networks as stated by
Lund (1983). (Matsumoto 2019, 114.) Additionally, Andersen and Halse (2023,
5) cited Kurilova-Palisaitiene et al. (2015), how the remanufacturers are not
sharing their information with each other because they perceive it as
confidential.

In a study by Russel and Nasr (2019) Bernon et al. (2018) and Reim et al.
(2018) state that companies that have well-established business models and
organizational structures may lack the necessary capabilities and knowledge to
implement circular initiatives. Russel and Nasr (2019) posit that a lack of
specialized knowledge, skilled labour, and product expertise may impede a
company's ability to effectively engage in value retention processes. This could
particularly hinder companies in the event of an increase in demand for circular
products, as those lacking the aforementioned factors may be incapable of
scaling up their production to meet such demand. (Russel & Nasr 2019, 18.)
 45

6.2.3 Product design

Product design has a crucial role in deciding if the product is fit for refurbishing
or remanufacturing. There are multiple ways how the OEMs can prevent the
reuse, as noted by Rivera and Lallmahomed (2016) in a study by Svensson-
Hoglund et al. (2021), such as shortening the product’s lifespan through design,
which is known as planned obsolescence, and using subpar materials that
result in low durability and short functional lifespan, known as premature
obsolescence. Additionally, the OEM can make software specifically for newer
models that lacks the compatibility with existing models, resulting in functional
obsolescence. Barthe et al. (2016) found that OEMs can also design their
products to be incompatible with third party spares and equipment. (Svensson-
Hoglund et al. 2021, 5.) These are in line with the interviews conducted by Cole,
et al. (2019). Their interviews pointed out that the OEM’s rather use strategies
to increase sales as opposed to prolonging a product’s lifecycle. Another
comment was made that some of the manufacturers are more inclined to
recycle rather than encourage reuse. (Cole et al. 2019, 4.) Similarly, Sundin
(2019, 50) stated that if the OEM is not considering the reuse of their products,
their products are more likely to have design choices that make it harder for
their products to be reused. Additionally, Alcayaga et al. (2019, 626) cited Singh
and Ordónes (2018) how the fast pace of technological progress is resulting in
increasingly complex products making them challenging to design in a manner
that allows for easy access to their components at the end of their lifecycle.
Therefore, it could be argued that the fast development in technology is making
reuse more difficult.

In a study by Matarin, Carles and Peiró (2022) a report by Restarters Barcelona

(2021) found repair success rates in small household items vary greatly across
different product categories. Mobile phones were found to have the lowest
repair success rate. The use of adhesives to fasten components together was
also identified as a significant obstacle to repair, as it often makes disassembly
without causing damage to the product extremely challenging. Overall, the
biggest hurdles in repair included expensive spare parts, lack of repair
information, no way to disassemble the product and lack of specialised tools.
(Matarin et al. 2022, 107.) The same obstacles were found in a study by
 46

Svensson-Hoglund et al. (2021, 6) cited Deloitte (2016) about the challenges

resulting from the design phase such as custom parts, adhesive use, and
custom tools. According to Jaeger and Upadhyay (2020), Torstensson (2016)
found that the disassembling modern products is costly and difficult due to the
products being complex. Preston (2021) explained that the number of
components in products has gone up while the size of them has gone down.
This trend, coupled with the use of a variety of different components, increases
product complexity. The study further adds that having the information
regarding the disassembly and life cycle of the product readily available would
make the disassembly process easier. (Jaeger & Upadhyay 2020, 741.)

6.2.4 Cannibalisation

According to a survey conducted by Nasr (2019) manufactures are not eager to

be involved in remanufacturing since they are afraid that it will cannibalize their
existing sales. If perceived in this manner by the manufacturers, they can limit
the remanufacturing options with company policies or by poor design choices.
(Steinhilper & Butze 2019, 100.) This statement is further strengthened in an
interview by Cole et al. (2019, 4), where one of the interviewees explained that
the manufacturers are preventing the reuse of their products since they do not
want that their new products to compete with them. Duberg et al. (2023)
proposed that companies could tackle the cannibalisation effect by
differentiating new products and reusing products. Their case company saw that
if new and reused products are different enough, the sales of new products are
not affected so much, and they could reach potential new customer segments.
(Duberg et al. 2023, 602.)

6.2.5 Brand image

Maintaining brand image is important for companies, as it serves as a key driver

of customer loyalty and trust. However, companies are faced with a significant
challenge in their efforts to participate in circular processes while
simultaneously preserving their brand image. Although organizations may
 47

possess the requisite skills and expertise to engage in circular practices, they
may choose not to do so to avoid disrupting their customers' focus on their
primary services. (Johnson 2022, 138-139.) Therefore, companies may see
entering the circular market as risky for their brand image. On the contrary, a
study by Duberg et al. (2023, 600) listed initiating reuse strategies as a driver
since it can improve organisations’ brand images.

According to the findings of Cole et al.'s (2019) research, there exists a concern
among OEMs regarding the brand image associated with the reuse of their
products. This apprehension is attributed to the lack of control that OEMs have
over the repair process, specifically in terms of who performs the repair and
whether it adheres to the original specifications intended by the manufacturer.
The risk that poorly executed refurbishments or remanufactured products may
be mistakenly associated with OEMs, which can have a negative impact on
their brand image. (Cole et al. 2019, 4.)

Steinhilper and Butze (2019) argue that companies can meet demands of
customer segments that did not exist before by offering high value with low cost
through reuse products. This can result in strong market penetration and
positive brand appeal since the quality and performance of reused products are
close or match those of new products. Moreover, having a lesser impact on
nature can increase the company’s image and further boost acceptance among
consumers and society. (Steinhilper & Butze 2019, 95, 114.)

6.3 Consumer behaviour

Ten of the sources selected for this study discussed consumer behaviour.
Through analysis of the material, the authors were able to identify six notable
factors related to this theme, namely product knowledge, quality knowledge,
cost knowledge, convenience, obsolescence, and demographics.
 48

6.3.1 Product knowledge

According to Alyahya et al. (2023), Wang and Hazen (2016) discovered that
consumers' product knowledge influences their purchasing decisions, which is
consistent with Wang et al.'s (2013) finding that consumers tend to perceive
refurbished products as inferior to new ones. However, Van Weelden et al.
(2016) found that their interviewees generally preferred refurbished mobile
phones, even though admitting to having limited knowledge about them.
Maniatis (2006) argued that sustainable behaviour is a combination of
environmental, cost, and quality knowledge, and this view is supported by
Alyahya et al.'s study, which suggests that a synergy of these three factors can
reinforce consumers' sustainable buying behaviour (Alyahya et al. 2023, 3). Van
Langen et al. (2021) recommends that consumers should be educated with
optimistic language to promote the transition towards circular products, and that
knowledge of the remanufacturing process can mitigate consumer biases (Van
Langen et al. 2021, 9-10). Therefore, educating consumers about the benefits
of reused products is crucial for the industry.

6.3.2 Quality knowledge

As reported by Alyahya et al. (2023) authors Gan and Chen (2019), Machado et
al. (2019), and Sarigöllü et al. (2020), found the perceived quality of a circular
product to have a significant impact on consumer behaviour, particularly when it
is high. In addition, research by Kuah and Wang (2020), Van Weelden et al.
(2016), and Wang and Hazen (2016) indicate that when consumers perceive
the quality of a refurbished product to be high, they are less likely to experience
the risk associated with purchasing such a product. Kumar et al. (2017) and
Singh et al. (2019) found doubt among consumers related to the quality of
remanufactured products that can be correlated to refurbished products as well
(Alyahya et al. 2023, 3). As per Gome’s, Moreira’s, Aldo’s and Motto’s (2022)
study, the authors Chamberlin and Boks (2018) suggest that advertising the
quality of circular products in a positive manner can further enhance impact of
such products on consumer behaviour. Conversely, if the product shows visual
signs of usage, it can have a negative effect as stated in a study by Mugge et
 49

al. (2018). In addition, the intention of consumers to purchase circular products

is positively influenced by the extent to which the physical characteristics of
such products satisfy their aesthetic preferences as shown in studies from
Pisitsankkakarn and Vassanadumrongdee (2020) and Wallner et al. (2020).
(Gomes et al. 2022,10.) These findings underscore the importance of perceived
quality in promoting reuse products such as refurbished smartphones.

According to Alahya et al. (2023), Qu et al. (2018) proposed enhancing the

perceived value of remanufactured products by emphasizing their
environmental sustainability. This perspective is consistent with the research
findings of Gaur et al. (2018), who suggests that consumers may not fully
comprehend the value of remanufactured products if they are not informed
about their environmental benefits. (Alahya et al. 2023, 3-4.) Moreover, Gomes
et al. (2022) found Wang (2020) and Hazen et al. (2016) highlighting the role of
consumer environmental knowledge in increasing the perceived value of
remanufactured products. Supporting these views, Wallner et al. (2020) found
that participants who purchased refurbished products believed that by doing so
they could reduce resource usage and waste production. These findings align
with the report by Shao (2019), which revealed that consumers are increasingly
aware of sustainability issues such as resource scarcity, climate change, and
environmental pollution, and consider these factors when making purchasing
decisions. (Gomes et al. 2022, 9.) Taken together, these studies suggest that
emphasizing the environmental sustainability of remanufactured products can
enhance their perceived value and promote their adoption by environmentally
conscious consumers.

Gomes et al. (2022) cited Baier et al. (2020) how the environmental
sustainability of circular products can be communicated to the customers with
labels indicating how green it is therefore making it more worthwhile to
purchase. Additionally, Shao (2019) stated that consumers may be willing to
pay extra for products that have transparent information regarding them.
(Gomes et al. 2022, 10.)
 50

6.3.3 Cost knowledge

According to research conducted by Machado et al. (2019, cited by Gomes et

al. 2022) the synergistic relationship between perceived quality and consumer
behaviour in the context of circular consumption is reinforced. Their findings
suggest that if a circular product is perceived as luxurious and priced
accordingly, it can have a positive impact on consumer buying behaviour.
Similarly, Wallner et al. (2020, cited by Gomes et al. 2022) viewed this as an
opportunity for consumers to obtain high-quality items at a lower cost than new
products. These insights highlight the potential benefits of positioning circular
products as premium offerings, both in terms of enhancing their perceived value
and increasing consumer demand. (Gomes et al. 2022, 6.)

According to Gomes et al. (2022), the authors Wang et al. (2020) and Hazen et
al. (2016) found that there exists a positive correlation between customers'
attitudes towards remanufactured products and the perceived high price of new
products. Furthermore, the authors suggest that a lower price of
remanufactured products can positively impact purchase intention, provided the
customer perceives the product's value to be high. (Gomes 2022, 6.) In a study
by Alyahya et al. (2023), Wang et al.'s (2022) showed that remanufactured
products typically cost 30-40% less than new products. This cost-effectiveness,
coupled with perceived value, makes remanufactured products more valuable
than new ones, as argued by Karjaluoto et al. (2019). (Alyahya et al. 2023, 3-4.)

In Van Langen et al.'s (2021) research, studies conducted by De Koch et al.

(2020), Hao et al. (2020), Comacho-Otero et al. (2018), and Smol et al. (2018)
were cited, which collectively identified the price of a circular product as a
crucial determinant in the consumer's decision-making process (Van Langen et
al. 2021, 8). Additionally, Rabiu et al. (2022) highlighted the insights of Van
Weelden et al. (2016) and Wallner et al. (2022), which indicate that the low-cost
differential between new and refurbished products may hinder customers'
decisions to purchase refurbished products, despite other motivating factors.
However, Wallner et al. (2022) also pointed out that concerns regarding product
hygiene and components that come into direct contact with the users' skin may
override price considerations (Rabiu et al. 2022, 9-10).
 51

6.3.4 Convenience

Gomes et al. (2022) reported on studies conducted by Chamberline and Boks

(2018), Clark et al. (2020), and Poppelaaresm et al. (2020), which indicate the
importance of convenience in the adoption of circular products and services by
consumers. D’agostin et al. (2020) established the lack of convenience as a
significant barrier to consumers' willingness to purchase. Additionally,
Camacho-Otero et al. (2019) provided an example of this by demonstrating
customer dissatisfaction with lengthy delivery times. Camacho-Oteo et al.
(2019) noticed that customers are more inclined to purchase more circular
products if they are readily available. This is further supported by Van Weelden
et al. (2016) by showing that without easy accessibility, customers are unlikely
to even consider buying refurbished products. (Gomes et al. 2022, 10.)

According to Gomes et al. (2022) Van Weelden et al. recommends that to

mitigate the perceived risk of purchasing refurbished products companies
should offer customers support and warranty. This recommendation is
reinforced by Poppelaaresm et al. (2018). Chamberline and Boks (2018) and
Gan and Chen (2019) suggest that offering warranties with products is a critical
approach in increasing consumer engagement with circular products. (Gomes
et al. 2022, 10.)

6.3.5 Obsolescence

As reported by Svensson-Hoglund (2022), the authors Jaeger-Erben, Frick, and

Hipp (2021) have identified that some consumers purchase new smartphones
merely out of a desire for novelty. Wieser and Tröger (2018) have explained
that smartphones are particularly susceptible to this type of purchasing intention
since they frequently become technologically outdated and can also serve
social or aesthetic needs. (Svensson-Hoglund et al. 2022, 11-12.) Study by Van
Langen et al. (2023, 10) cited Van Weelden et al. (2016) that consumers who
seek novelty are less likely to purchase refurbished phones. According to
Rabiou and Jaerger-Erben (2022), Mugge et al. (2017) refer to these types of
 52

consumers as "expert consumers" who do not desire older models and

therefore are less inclined to purchase refurbished phones (Rabiou and Jaeger-
Erben 2022, 10). Accordingly, the consumers desire for the latest phones can
be seen as a barrier.

In their study, Rabiou and Jaeger-Erben (2022) presented the findings of

Magnier and Mugge (2022), which identified several factors associated with
early smartphone replacement, including corporate sales and promotions,
phone reliability, and repair costs and difficulty. Meanwhile, Wieser and Troeger
(2018) have suggested that offering warranties for used products can be an
effective strategy to nudge consumers towards purchasing reused products. In
addition, their study also found that consumers' tendency to replace their
smartphones early may be attributed to perceived obsolescence, wherein they
consider their current phone outdated, even though it is still operational.
(Rabiou & Jaeger-Erben 2022, 10.)

6.3.6 Demographics

According to Rabiou and Jaeger-Erben (2022) the authors Alsuwaidi et al.

(2022) determined that demographic variables are the key-factor for sustainable
purchasing behaviour. Additionally, Rabiou and Jaeger-Erben (2022) found that
highly educated older men with high incomes are more likely to purchase
remanufactured products. (Rabiour & Jaeger-Erben 2022, 10.) Contrarily, the
Recommerce Barometer 2022 identifies young consumers (ages 18-34) as the
largest group that has already owned a used or refurbished smartphone. While
Gomes et al. (2022, 8-9) acknowledges the influence of demographics such as
age, gender, education, nationality, and household size on consumer behaviour
towards circular products, previous studies lack a consensus on this topic.
 53

7 Findings

Three main themes were identified during the data collection process regarding
the concepts that affect the circular economy of smartphones in the EU. These
themes were further reinforced by the materials during the writing process of the
synthesis and are therefore used to categorize the findings. The research
question that guided this study was “What are the drivers and barriers to the
circular economy of refurbished smartphones in the European Union?”.

In this research, 11 drivers and 21 barriers were identified from the selected
materials. Six drivers and seven barriers were discovered related to legislation
and policies, and three drivers and ten barriers associated with manufacturing
and infrastructure. Two drivers and four barriers concerning consumer
behaviour were recognized. However, there is considerable overlap and
interconnectedness between individual drivers and barriers. As illustrated in
Table 2, the drivers and barriers were categorized by the themes and grouped
by colours to indicate connections between different drivers or barriers. While
the individual drivers and barriers exist on their own, they should be thought of
as part of the circular economy system. The grouped drivers and barriers are
examined in the coming sections in more detail, with groups of drivers being
presented first and barriers after.

Table 2. 11 drivers and 21 barriers were identified in the research.

 54

7.1 EU demonstrates strong commitment to circular economy

The EU has demonstrated a strong commitment to the transition towards a

circular economy, as evidenced by its adoption of various strategies and
policies, including the Circular Economic Action Plan (European Commission
2023a). Despite some shortcomings in these policies, the overarching aim is to
promote circular practices and facilitate the transition towards a circular
economy. In support of this goal, the EU has frequently introduced new
directives and policies that seek to promote the circular economy of electronics,
such as the right to repair proposal. Although this directive focuses primarily on
repair rather than refurbishment, it aims to increase the lifespan of products,
which would also benefit refurbishment. It is reasonable to expect that similar
directives aimed at supporting other reuse methods may follow.

The EU and its member states have adopted a decisive position against
planned obsolescence. According to Svensson-Hoglund et al. (2021), this is
being achieved at the EU level through the Circular Economy Action Plan,
which emphasizes design for reuse and repair, and an implementation of a two-
year minimum legal guarantee period. Several member states have even
exceeded this requirement. (Svensson-Hoglund et al. 2021, 9.) Additionally,
numerous member states and countries worldwide have sued and fined major
smartphone manufacturers for their planned obsolescence practices to boost
sales, sending a message that such actions will not be accepted. This
establishes a promising precedent and motivates large corporations to refrain
from planned obsolescence, which can benefit smartphone refurbishing due to
increased physical lifespan and prolonged software support.

7.2 Cost effective products attract customers

Taxation policies have the potential to significantly benefit the refurbished

smartphone market in the EU. As noted by Friant et al. (2021, 347), several
studies have demonstrated that the EU incentivizes the imposition of higher
taxes on raw materials and lower value added taxes on reused products.
Although practical examples of such policies are currently lacking, the
 55

introduction of such policies would greatly benefit the smartphone refurbishment

industry. This is due to price, and the price differential between new and
refurbished products, being the primary factor influencing consumer behaviour
when it comes to purchasing refurbished smartphones. The cost difference
between new and refurbished mobile phones can also be seen as a driver for a
company. As a result of the price difference, companies can attract different
customer segments such as customers with lower income. The reviewed
literature indicated that when consumers perceive the value of refurbished
products to be high and the price to be lower than that of new products, they are
more inclined to purchase them. Individuals who are hesitant to purchase a
high-end smartphone at a high price, may find a refurbished smartphone with
up-to-date specifications and a lower price point of greater appeal.

Waste management policies can have a positive impact on the smartphone

refurbishment industry in various ways. Under the Extended Producer
Responsibility legislation, the EU mandates that producers finance and arrange
for the return of products for reuse and recycling (Russel & Nasr 2019, 2). In
addition, Milios (2021, 493) reports that, according to Lokrantz (2019),
governments can incentivize waste holders to opt for reuse or repair options by
imposing waste management fees. Moreover, some producer responsibility
organizations are exploring the possibility of granting third-party access to the
waste stream. All these measures have the potential to increase the availability
of spare parts while reducing their cost through increased supply. Given the
regular need for spare parts in smartphone refurbishment, these initiatives could
be highly beneficial. The increase in waste management fees can also further
motivate the design of longer lasting, and more easily repairable products.

Ecodesign regulations currently focus on enhancing the repairability and

recyclability of products, which facilitates product disassembly and increases
the availability of spare parts (Friant et al. 2021, 347). This has positive
implications for the refurbishment of smartphones, as ease of disassembly can
reduce the labour-intensive nature of the process in addition to improving spare
part availability. With lower labour costs due to a more streamlined process,
companies may be able to sell products at a lower, more attractive price.
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7.3 Communicating product quality to consumers can increase

perceived value

Russell and Nasr (2019, 23) and Milios (2021, 494) suggest that implementing
product quality standards and certifications can play a crucial role in enhancing
consumer knowledge and trust regarding the quality of circular products. While
such measures are currently absent, the EU's proposed right to repair
legislation offers similar voluntary standards and certification. It would be logical
for the EU to institute a similar system for other reuse practices in the future.
Establishing a comparable system for circular products could reduce the risk to
consumers, increase trust and product knowledge, and lead to increased
demand in the refurbished smartphone market.

The reduced consumption of new resources and lower resource costs resulting
from utilizing existing products and components during refurbishment can
motivate companies to engage in refurbishing. This incentive allows firms to cut
costs and broaden their customer bases. Additionally, companies can
potentially convey these savings to the final product, which further benefits
customers by providing cost-effective and high-quality options.

Firms can attract more customers towards their refurbished products by

combining affordability, high quality, and performance, therefore enhancing
brand image and reputation among consumers. Consequently, offering
refurbished products can be a viable strategy for companies to improve their
image, particularly if they communicate their commitment to green values. Such
communication can further increase acceptance among consumers and society.
The increasing consumer awareness of sustainability issues has led to a
growing consideration of these factors in purchasing decisions. Therefore,
marketing refurbished smartphones as sustainable products can appeal to a
wider group of consumers and emphasizing their sustainability aspects can
enhance their perceived value.
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7.4 Insufficient policies hinder circular practices

Insufficient holistic approaches to policies may hinder refurbishment practices.

Despite the EU having implemented a multitude of initiatives to support the
circular economy, many of these policies lack comprehensive implementation,
clear targets and indicators, and are not mandatory. It seems that policies are
not always developed with the overall vision of the circular economy in mind.
Instead, they often neglect social aspects or focus solely on specific concepts
such as repair or recycling. Moreover, different reuse processes such as
refurbishment have their distinct practical needs, and the requirements of all of
these processes used to extend a product's lifespan need to be considered.

Disconnected policies that prioritize one form of reuse over another may
negatively affect other options. For instance, several scholars argue that
Ecodesign could be more effective if it incorporated value-retention processes
more comprehensively, instead of focusing on recycling and repairability.
Additionally, taxing a single material may lead to substitution with raw materials
used in manufacturing, leading to unpredictable environmental and economic
consequences. Although taxation can support refurbishment and other reuse
methods, it should be integrated with other policies and taxes to promote a
more circular economy.

The absence of well-defined targets and indicators presents a challenge in

evaluating the effectiveness of individual policies. Furthermore, non-mandatory
policies or those left to member states' discretion may also result in reluctance
to implement strict requirements, as they may hinder the functioning of single
markets (Friant et al. 2023, 2). Therefore, a more comprehensive and
mandatory approach to policies is necessary to ensure the success of circular
economy practices.

7.5 Lack of knowledge impedes refurbishing

Svensson-Hoglund et al. (2022, 2) asserted that in order to facilitate the growth

of repair operations, governments must have a comprehensive understanding
of the challenges and opportunities associated with these processes. As repair
 58

constitutes an integral component of the refurbishment process, it stands to

reason that governments may also lack knowledge of refurbishment operations
as well. For policies to be effective in promoting the refurbishment of
smartphones, it is imperative to fully comprehend the needs and requirements
of these processes. Furthermore, a notable barrier to achieving circularity in e-
products is the insufficient cooperation among stakeholders engaged in circular
practices. Lack of cooperation between businesses and governments could also
partially explain governments' limited understanding of reuse strategies.

Additionally, insufficient knowledge of refurbishment, a shortage of skilled

labour and a lack of product expertise can impede a company's ability to
effectively engage in refurbishing. This, in turn, can potentially hinder their
capacity to scale up production to meet the surging demand for refurbished
items like smartphones. As a result, even companies with well-established
business models and organizational structures may encounter difficulties in
implementing refurbishing due to limited capacities and expertise. To increase
the awareness of refurbishing and its processes, companies should adopt an
organization that shares knowledge, similar to the European Remanufacturing
Council, which has successfully promoted knowledge-sharing in the
remanufacturing industry. Overall, proactive measures from businesses and
governments are essential in overcoming institutional barriers such as inertia
and bureaucracy.

7.6 Administrative costs pose challenges for refurbishing

The EU's waste management directives currently prioritize recycling as the

primary means of implementing circular economy practices, as several authors
have noted. While recycling is an important component of the circular economy,
it represents only one aspect of the process of extending the life cycle of
products. Therefore, it is necessary to shift waste management directives
towards a system that prioritizes waste prevention and reuse before considering
recycling as the end-of-life option for products. Such a shift would enable a
wider range of reuse practices and facilitate the implementation of circular
economy practices that extend beyond recycling.
 59

Refurbishing smartphones can be challenging due to the regulations within the

EU regarding the use of chemicals in products. The product legislation principle
of the European Commission requires products to meet the legislative
requirements at the time of their initial market entry to be repaired, as stated by
Svensson-Hoglund et al. (2021, 6). However, the REACH directive necessitates
manufacturers and producers of refurbished components to gather and report
data on the chemical substances present in the products, leading to
considerable administrative duties and inventory tracking. These regulations
can pose challenges for companies that want to refurbish smartphones and
extend their life cycle.

The collection of products and components known as cores is often regarded as

a significant challenge due to its associated costs. Particularly for companies
with their own collecting infrastructure, collecting these components can be
expensive. Even with a take-back system in place that acquires the required
cores, companies must still devise ways to store them and determine their
quality, adding to the overall cost of handling these components. The
confluence of these factors can be viewed as either multiple barriers or one
major barrier to implementing refurbishing.

7.7 Manufacturers obstruct refurbishing

The EU and the United States differ in terms of intellectual property rights with
regards to the repair process. The EU takes a comparatively more lenient
stance, as contracts cannot impede the repair process. However, technical
innovations are still protected by patents, including reconstruction and
modification activities. An example of a legal dispute related to this issue
occurred in Norway, where refurbished spare parts bearing the Apple logo were
deemed counterfeit. This legal precedent and the existence of patent laws raise
concerns regarding potential implications for the refurbishment of smartphones
and refurbished spare parts.

Refurbishing is an attractive option for OEMs, as they have control over the
entire design process, related systems, and distribution. As such, they can
decide whether to make their products easier to refurbish by third-parties or to
 60

design them in a way that makes it difficult without proper information that only
the OEM possesses.

Design choices can hinder the willingness to enter the refurbishment market.
OEM’s may have intentionally designed their product in such ways that it makes
them considerably harder to disassemble without destroying components.
Additionally, the rapid advancements in technology can make the designing of
reusable products challenging, as the components are getting smaller and the
products more complex. As explained by Restarters Barcelona (2021 cited by
Matarin et al. 2022, 107) how mobile phones have the lowest repair success
because of manufacturing designs such as the use of adhesives and
specialised tools that make repairing them more challenging.

7.8 Refurbished products cannibalise new sales

OEMs are afraid that introducing cheaper refurbished mobile phones into the
market will eat their existing sales from selling new products. Therefore,
cannibalisation can be seen as one of the barriers. However, if the refurbished
products are marketed and priced accordingly, they can open new possibilities
in the form of reaching new customer segments.

Besides positive brand image being one of the possible drivers it can also be a
barrier. OEMs are afraid that if the refurbishment process is done by a third-
party, it will not follow the same standards as they have in repairing. Therefore,
poorly executed refurbishment can lead the consumers to relate the negative
feelings towards the OEM, which means increasing the negative brand image
towards it. This could be mitigated if refurbishment would have a set of
standards for the performing company to follow and if the OEMs would be
willing to share more information regarding the disassembly and repairing of
their products.
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7.9 Consumers have a negative perception of refurbished products

The perception of refurbished mobile phones as inferior products in comparison

to new ones is a widely acknowledged phenomenon among consumers, as
supported by various authors, including the study by Alyahya et al. (2023). This
consumer bias towards refurbished products can pose a significant challenge
for companies seeking to enter the refurbished market. It is therefore crucial for
companies to effectively communicate the benefits of refurbished products and
increase consumers' perceived knowledge to reduce their feelings of risk. If the
consumers worry about the quality of refurbished products is not considered,
the sales of those products will be affected.

One important aspect that companies must address is assuring consumers that
refurbished mobile phones are hygienic. Otherwise, the feeling of disgust
among consumers can be considered as a significant barrier to their adoption.
Additionally, pricing is another crucial factor that can hinder the success of
refurbished products. Consumers may be less willing to buy a refurbished
product if the price is too close to that of a new product.

Furthermore, consumers who prioritize novelty over other factors may not be
interested in refurbished mobile phones, serving as another barrier to their
widespread adoption. Finally, the need for convenience is a key factor for
consumers, and companies must ensure that they can provide the necessary
convenience to encourage consumers to choose refurbished products over new
ones. Convenience includes such factors as availability, warranty, and service.

8 Discussion and conclusions

This thesis examined the concept of circular economy from the perspective of
the refurbished smartphones market. The research was conducted as a
narrative literature review and focused on current literature. A wide overview of
the subject was constructed with the synthesis, and the findings answered the
research question “What are the drivers and barriers to circular economy of
refurbished smartphones in the European Union?”. The study examined a total
 62

of 28 sources, which consisted of 31 articles. Through analysis of said sources,

the authors identified 11 drivers and 21 barriers that were subsequently
categorized into three themes present in the selected literature. The recognized
themes were legislation and policies, manufacturing and infrastructure, and
consumer behaviour. The authors of this thesis discovered that the drivers and
barriers were highly interconnected with each other.

The EU has shown a strong commitment to the transition towards a circular

economy. However, the implementation of directives and policies was found to
lack precision and a holistic approach. While the strategies, directives, and
policies have generally had a positive impact on refurbishment practices, the
policies often only focus on a single aspect of the circular economy, instead of
considering multiple types of reuse practices. This approach may have negative
effects since different reuse processes have diverse requirements. For
instance, waste management policies prioritize recycling, whereas the
refurbishing of smartphones could benefit greatly from having access to
smartphones that are considered waste for refurbishing or the harvesting of
spare parts. Additionally, it was found that policies are often not introduced in
combinations to support circular practices, which could have a more significant
impact than singular policies by themselves. Moreover, the effectiveness of
policies is undermined by insufficient targets, indicators, and non-mandatory
policies. Although consumer knowledge on reuse practices is broadly
recognized as an essential factor in buying behaviour, social aspects are often
disregarded in policy making. It was found that legislation and policies were
deeply connected in the other themes discussed in this thesis, and thus, future
policies should be implemented in a more holistic fashion.

The authors suggest that the transition towards a circular economy in the EU is
still in an early stage but holds significant potential to benefit the refurbishing of
smartphones in the future. The authors speculate that a combination of future
policies could have a substantial impact on the demand for refurbished
smartphones. Such policies may include tax reductions for circular products, tax
increases for new products, quality certifications and standards, campaigns to
increase consumer awareness, more stringent Ecodesign regulations, and
waste stream access for refurbishment companies. The authors contend that
 63

the implementation of these policies would not be inconceivable in comparison

to what the EU has currently implemented.

Manufacturing and infrastructure are essential aspects for smartphone

refurbishment companies. Refurbishment presents an opportunity for
companies to generate substantial profits, given that refurbished products are
significantly less expensive to produce than new products, particularly due to
the escalating cost of raw materials. It is expected that the cost of finite raw
materials will continue to rise, and the potential for the imposition of raw
material input taxes further intensifies this issue. However, the inhibiting factors
regarding manufacturers are numerous. For refurbishing to be profitable,
efficient collection infrastructure is needed to be strategically implemented.
Building a collection or take-back system can be an extremely difficult and
expensive endeavour. According to the research findings, waste collection has
the potential to assist in mitigating the issue. However, it is currently observed
that e-waste collected is regarded as waste and handled as such. The harsh
handling of collected e-waste results in further damages and reduced product
quality, ultimately limiting the number of items that can be refurbished or the
components that can be harvested.

Research has revealed that companies are hesitant to embrace reused

products as they may compete with their products, cannibalise existing sales,
and damage their brand image. The studies indicate that while the smartphones
share a product category, new products and refurbished ones do not directly
compete due to one being generally an older product and from a significantly
cheaper price point. Manufacturers have been found to resist sharing
information about their products for refurbishing purposes and may even
deliberately design products to become obsolete prematurely to boost sales of
new products. In response to the EU and its member states' strong stance
against planned obsolescence, manufacturers may be deterred from such
practices. Nonetheless, manufacturers can circumvent this issue by designing
products for easier recycling as it usually makes the product more difficult to
process for other reuse purposes. The increasingly compact size of
smartphones, coupled with a growing number of individual components, the use
of adhesives in place of screws, and the utilization of manufacturer-specific
tools during assembly, present challenges for the refurbishment process.
 64

Access to information on the product, its life cycle, and manufacturing could
significantly aid disassembly and refurbishing.

Brand image is crucial for companies, and manufacturers fear that customers
may confuse substandard refurbished products with the original brand, leading
to damage to the brand image. However, the studies show that participating in
reuse practices can improve brand image. Companies may also be unwilling to
participate in reuse practices due to well-established linear economic business
model, or they may lack the capabilities and knowledge to do so. Refurbishing
requires specific knowledge of the subject, highly skilled labour, and product
expertise. Without these assets companies may be unable to scale up their
production to profitable levels of efficiency and therefore keep to their linear
business model.

The authors argue that manufacturers require more motivation to produce

products that are appropriate for reuse and to share information for such
purposes. While the primary objective of most companies is to generate profits,
it is up to the EU to promote and enable this transition in practices. Although the
EU has implemented current policies and regulations to encourage this shift, the
authors suggest that more drastic measures are necessary to prompt
manufacturers to comply. Additionally, it could be said that the cooperation of
governments and refurbishing companies is essential to build a waste
management system, not only to reduce the amount of e-waste but also to
provide companies with a steady supply of products and spare parts to
refurbish.

The attitude of consumers towards refurbished items and other circular goods is
influenced by a range of factors. One of the primary challenges associated with
refurbished goods is the perception that they are inferior in quality compared to
new products, which can be attributed to the general quality perception of
circular items. Consumers with limited knowledge of product quality are inclined
to view the purchase of refurbished goods as risky. While the provision of
customer service and warranties can mitigate this concern, companies should
also prioritize consumer education to bridge the gap between perceived and
actual product quality. Additionally, environmental sustainability can contribute
to the perceived quality of products and should be more effectively
 65

communicated to consumers. Despite the growing consideration of

environmental factors in purchasing decisions, consumers may still lack a
comprehensive understanding of the environmental benefits of circular
products. Sustainability and quality labels based on standards and advertising
campaigns to educate consumers on the environmental impact and product
quality could be highly beneficial to change consumer perceptions of
refurbished smartphones. Developing sustainability and quality labels that
adhere to standards and implementing advertising campaigns aimed at
educating consumers on the environmental impact and product quality could
prove highly beneficial in altering consumer perceptions of refurbished
smartphones.

The study revealed that the determining factor influencing consumers' purchase
decisions is price. When the price differential between circular goods and new
products is narrow, it negatively affects consumers' purchasing behaviour
towards circular products. However, if the quality of circular products is high and
their price is lower than that of new products, this increases the perceived value
and demand for circular goods. The results of the study also suggest that if
consumers perceive a circular product as a premium item available at a low
price, they are more inclined to choose it over new products. Typically, circular
goods are priced 30-40% lower than new products, emphasizing the importance
of companies prioritizing high-quality circular products. Moreover, the
convenience of purchasing circular goods was identified as a crucial factor for
consumers. In the absence of easy accessibility, consumers are unlikely to
consider circular products as a viable option.

The replacement of smartphones is influenced by the perceived obsolescence

of the device. Corporate sales, promotions, phone reliability, and repair costs
are some of the factors that contribute to the early replacement of smartphones.
Additionally, some consumers replace their smartphones because they consider
them technologically outdated or too old, even if the device is still operational.
Furthermore, consumers who purchase new smartphones for social or aesthetic
purposes are less likely to consider refurbished or older models. The studies
also revealed that older, highly educated men with higher income levels were
more inclined to purchase remanufactured phones, which could also be
applicable to other reuse methods such as refurbishing. However, this finding
 66

may contradict with the Recommerce Barometer of 2022, which found that 18-
34-year-olds were the largest group to have owned a reused smartphone. This
could indicate that young people are more open to the idea of circular products
or overall more aware of the environmental impacts of the linear economy.

In line with Friant et al.'s (2021) research, the authors of this thesis argue that
the EU's vision for a circular economy appears to be at odds with its current
actions. Recycling rates for smartphones remain low, despite e-waste
management directives prioritizing recycling. Furthermore, manufacturers may
prefer recycling over designing products for reuse to avoid competition with their
own products. As such, Ecodesign and waste management policies seem to
contradict the principle of circular economy, which aims to maximize the
utilization of raw materials and used energy with reuse practices that multiply
the product's lifespans. Therefore, recycling should be the final stage in a
product's lifecycle. Additionally, the authors observed a significant variability in
the terminology and definitions of circular economy concepts. As circular
economy is a complex and wide-ranging concept, a standardization of
terminology across the industry could facilitate the implementation and adoption
of circular practices on a global scale. In contrast, ambiguous or imprecise
terms could potentially impede the progress towards circular economy. The
authors speculate that vague terms in reuse practices may also cause
uncertainty and mistrust for consumers due to not understanding the processes.

The authors conclude that the barriers that companies in the smartphone
refurbishing industry face are more numerous than the drivers. While a single
cause for this could not be identified in this study, the authors argue that it is
due to a combination of interconnected factors. The EU’s role as a facilitator
and enabler of circular economy is clear, but the manufacturers need more
incentives and restrictions to change product design in a way that supports
methods of reuse throughout the product’s lifecycle. Consumers are also a
critical part in the circular economy and should be considered as such in
strategies and policymaking. As the transition to circular economy is not the
responsibility of a single group or organization, stakeholder cooperation is
crucial to facilitate the shift to circular practices.
 67

This study strived to ensure the reliability of its research process by closely
adhering to the four-step methodology developed by Kangasniemi et al. (2013)
and complying with research integrity principles. The research process was
documented extensively, and the choices made were reported thoroughly to
promote transparency. To minimize personal biases and subjectivity, the
authors assessed the proposed choices collectively. However, subjectivity in the
selection of materials is a possibility due to the nature of a narrative literature
review process. However, great care was taken in the evaluation of whether the
sources had any relevant implications or potential effects regarding the
research question.

The selection criteria were found to be effective by the authors. Although the
inclusion of a broader time range beyond 2018-2023 could have provided a
wider view of the subject, the authors opted to focus on the most recent
literature pertaining to the topic. This approach proved beneficial, as the authors
noted that certain legislative and policy-related aspects discussed in an article
published in 2021 were already outdated. To ensure reliability and
transparency, only open-source materials were selected, and the English
language was used as a criterion to incorporate an international perspective.
While sources in Finnish could have been incorporated in the study, doing so
would have necessitated additional search processes and were therefore
excluded from the present analysis.

To ensure the credibility of the study, the research relied solely on peer-
reviewed articles and ebooks obtained from trusted databases that were
recognized to contain a substantial amount of literature on the subject matter
during the initial exploration of the subject. Although other databases may have
held relevant materials, the number of relevant sources from different aspects of
smartphone circularity were considered adequate by the authors of this thesis.
A significant portion of the selected materials consisted of literature reviews,
which had both advantageous and disadvantageous effects on the research. On
the one hand, the inclusion of a vast number of literature reviews provided a
comprehensive and inclusive perspective on the subject matter, as many of
them additionally included older relevant works as sources. However, as the
materials comprised a significant number of secondary sources, it presented
challenges for writing and readability of the synthesis.
 68

The research process acknowledged ethical considerations, although the nature

of the narrative literature review process did not necessitate the handling of
sensitive information. ChatGPT served as a tool during the writing process to
generate synonyms for words and phrases to decrease repetition in writing,
similarly to the function of thesaurus. However, it should be noted that full
sentences generated by the tool were not used.

Although the authors endeavoured to eliminate personal biases and subjectivity

and undertook a systematic approach to data collection, the possibility of
overlooking relevant information cannot be entirely ruled out. Nevertheless,
given the substantial number of literature reviews included in the sources, the
authors are confident that a comprehensive view of the subject was achieved,
and the research question was answered adequately. The study added to the
existing literature by compiling information on smartphone refurbishing and
offering insights into the gathered data and its implications. Other works that
focus on the topic of this thesis were not found during the data collection
process.

This thesis provides a comprehensive analysis of the current research, which

provides a summary and outlines the beneficial factors and challenges in the
field of smartphone refurbishing. These findings can be utilized by both
established and newly formed companies in the industry to gain a competitive
edge and mitigate difficulties associated with refurbishing practices.
Additionally, the study could be used in further research on the topic of circular
economy and smartphone refurbishing.

The authors identified considerable academic attention towards the concept of

circular economy. This study shows that much of the existing literature
concentrates on the EU and its policies, while there appears to be insufficient
information about reuse processes and consumer behaviour. Additionally,
research on the current effects of the implementation of circular practices
seems to be inadequate. Therefore, the authors of this thesis suggest reuse
practices, consumer segments of refurbished smartphones, and the impacts of
current refurbishing practices as topics for further research.
 69

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