Regulatory Trends Point to a Green Future, But Are Electronics Manufacturers Ready?

Innovation, particularly in electronics manufacturing, occurs in one of two ways: organically and artificially. The former is the result of a natural progression of technology and consumer expectations, occurring as a part of the organization’s evolution over time. The latter, however, is far more abrupt. In this case, a major variable, such as a global catastrophe or rapidly introduced legislation, forces change upon electronics manufacturers — regardless of if it is ready or not. In 2023, it appears the industry is about to experience just such a variable, and the sooner preparations are made to embrace the needed changes, the better.

The most recent evidence of this can be seen in the U.S., where Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ed Markey (D-Mass.) have announced the reintroduction of their signature Green New Deal. Originally introduced in 2019, the legislation called for an unprecedented amount of environmental and economic reforms. These include not just ambitious goals such as making U.S. grids 100% powered by clean, zero-emission energy sources, but also elements that would have a direct impact on all manufacturing industries. Such elements included a carbon tax, as well as mandatory upgrading of all existing buildings (or the creation of new buildings) to achieve maximum energy efficiency. Although the bill originally did not receive a single vote in the Senate (for context, 43 of 47 Democrats voted present, despite many expressing support for parts of the bill), the current administration has indeed used elements of it as a framework for its own plans, such as its 2021 infrastructure package. (For example, the infrastructure package included a $480 billion investment to boost manufacturing and research and development, some of which might boost clean energy, which is narrower in scope but nevertheless aligned with Green New Deal principles).

As of this writing, with a divided Congress, there is little chance of the latest Green New Deal proposal becoming a formal law, but this is not the point. The point is that four years later, the green-focused goals of the resolutions have not faded into the background; to the contrary, as the years pass and Green New Deal principles remain in the consciousness of lawmakers and the general public, the more likely the ideas outlined in the resolution will find their way, in some form, into the current regulatory landscape. Sooner or later, manufacturing industries are going to see fundamental changes in their processes.

This does not mean to imply that there are no benefits to be had with such changes, not just in environmental terms (currently, the electronics industry accounts for 4% of global greenhouse gas emissions), but in tangible financial terms. According to a recent report from IDTechEx, titled “Sustainable Electronics Manufacturing 2023-2033”, manufacturing has several opportunities to minimize costs, maximize energy efficiency, and increase profit margins. For example, says the report, switching to additive methods of PCB manufacturing can lower water consumption by up to 95% – an outcome that could save the sector hundreds of millions of liters of water annually.

Making such changes quickly requires significant — even historic — levels of capital investment. Some large-scale manufacturers, such as Samsung, IBM, and Intel have already achieved or have nearly achieved 100% renewable energy reliance through a combination of infrastructure upgrades and new facility construction, but other manufacturers simply do not have the sufficient on-hand financial resources to make such a transition in a timeframe government mandates will demand. As the year progresses, electronics manufacturers who may not be in the position to quickly adopt new, “greener” processes and technologies will need to adopt strategies that can boost their on-hand capital now.

For more information how, contact a Partstat representative today!