Suppliers Partnership for the Environment publishes circular economy guidance for automotive packaging
As the automotive sector prepares for stricter regulation and mounting pressure to adopt more sustainable business practises, the Suppliers Partnership for the Environment has published a guidance document sharing advice for companies across the automotive supply chain to apply circular economy principles to packaging.
James McLoughlinJamesMcLoughlinAssistant Editor - Automotive Logistics
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Achieving a circular economy within automotive packaging requires end-to-end consideration of reuse, recycling, returns and repairsFirefly AI
Published in August 2026, 'Applying Circular Economy Principles to Automotive Packaging' is a guidance document created by the Suppliers Partnership for the Environment's Sustainable Packaging Working Group to "provide high-level information on the application of circular economy principles within automotive packaging".
The Suppliers Partnership for the Environment (SP) emphasised that sustainable and circular packaging is addressed not only as an end-of-life issue, but also as an upstream design and sourcing consideration. It pointed towards three key principles for a circular economy, identified by the Ellen MacArthur Foundation (EMF): eliminating waste and pollution; circulating products and materials at their highest practical value; and regenerating nature.
Three key principles for a circular economy
Eliminating waste and pollution: To adopt this principle in the context of automotive packaging, SP suggested companies can take actions including "reducing unnecessary packaging components, simplifying packaging formats where appropriate, selecting materials thoughtfully and avoiding design features that create avoidable waste or make downstream recovery more difficult".
Circulating products and materials at their highest practical value: Within automotive packaging, SP highlighted use of returnable packaging as a strategy for implementing this circular economy principle, viewing recycling as "the option of last resort" due to the loss of embedded value in the packaging but describing the process as "essential" as the final step in ensuring materials remain within a circular economy.
Regenerating nature: To adhere to this principle practically with regards to automotive packaging, SP encouraged firms to consider how materials are returned to biological systems after they have reached the end of their life cycle – the organisation noted that while this principle might be less central to the circular economy approaches of automotive companies, it is a particularly important consideration when it comes to single-use packaging and consumer packaging in the aftermarket.
When looking to implement circular economy principles within the world of automotive packaging, SP noted that designing packaging with its eventual circulation and environmental impact in mind is key. Considerations the organisation identified when designing circular packaging include features that support repeated use, component replacement, refurbishment and practical recovery of materials at high value.
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"In this way, packaging design can help preserve value not only during initial use, but also through the next use, next loop, or next recovery pathway," the forum explained in its guidance document.
SP also acknowledged that in practise, circular outcomes are most meaningful where "the intended reuse or recovery pathway is not only technically possible, but also practical and economically viable within the operating context".
One OEM that has already begun to make circularity a more important consideration is Toyota. Speaking to SP, Peter Steuer, senior manager of supply chain at Toyota Motor North America, noted that the company is actively pursuing parts packaging design with reuse in mind.
"Where reuse is not viable, Toyota is focusing on identifying materials to ensure 100% recyclability of parts packaging at end of life," Steuer explained.
This approach is not limited to Toyota's North American operations. At ALSC Europe earlier this year, Andy Winebloom, senior manager at Toyota Motor Europe, emphasised the importance of adopting a design-for-packaging approach, taking this one step further by actually allowing packaging considerations to influence parts design. He explained that beyond the environmental benefits, designing parts with packaging in mind can also improve cost efficiency.
"In our experience, the earlier you can be involved the better," Winebloom told Automotive Logistics. "This, coupled with early engagement with purchasing about supplier selection – getting those big, expensive and complex parts closer to the delivery point – [has allowed us] to save up to 30% of our delivery costs."
"The company is also integrating sustainability-focused designs from the SP guidelines into its packaging requirements to reduce environmental impact across the supply chain while supporting circular economy principles," Grewal added.
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Speaking to Automotive Logistics on the Red Sofa at ALSC Global in 2025, Grewal noted that using expendable packaging for international shipments is "not cost-effective" due to the costs associated with disposing or recycling these materials at end of life.
"Having a technology for returnable containers would benefit us from two ways: one is that we don't have to reinvest in that expandable packaging, but also when we dispose of that packaging we don't have to incur that cost," she explained.
What makes packaging circular?
According to SP guidelines, there are a number of attributes that automotive packaging can have in order to facilitate a circular economy in the automotive supply chain. First, packaging can be designed for a longer lifespan. Making packaging more durable can help to keep it in circulation for longer, reducing demand for additional packaging and contributing to a more circular supply chain.
The next consideration is reusability. Designing packaging so that it not only stays in circulation longer, but can also be repaired or reused to – in SP's words – "help preserve more value than single-use packaging, followed by material recovery". The organisation noted that design features such as durability, modularity, accessible components and replaceable parts can help ensure packaging remains in use longer through maintenance,repair, refurbishment or replacement of selected components. This would contribute to more efficient use of materials and assets over time.
However, SP noted that reuse is not universally appropriate, so adoption should be considered on a case-by-case basis, taking into account factors such as transport loops, asset recovery, cleaning requirements, reverse logistics, packaging loss rates, handling conditions and cost.
The final important consideration SP identified from a packaging design perspective was how packaging can be designed to support recycling and material value retention. It noted that "recycling remains an important pathway for packaging materials, particularly where reuse is not feasible" – effective recycling, it said, can help reduce material loss, support continued circulation of useful materials and lessen reliance on virgin inputs.
SP drew attention to two different examples of firms in the automotive packaging sphere that have designed systems for the recycling of end-of-life packaging to help create new packaging using recovered materials. One such example comes from the Green Processing Company, which processes obsolete vacuum-formed trays into regrind, which is then dry washed, removing contamination and removing dust particles. This material can then be shipped to sheet manufacturing companies to be extruded and used to make new automotive trays.
The second example SP highlighted was Pratt Industries' 'Close the Loop' corrugated packaging circularity programme, which allows companies to return their old corrugated containers, with rebates offered for baled material and discounted returns available for loose containers.
Reverse logistics systems also key for circularity
Beyond packaging design, the systems in place to recover packaging and materials also play a vital role in enabling a circular economy for automotive packaging.
"Collection, sorting, storage, transport and end-market access can all influence whether packaging is actually recovered and returned to productive use," explained SP in the guidance document. "Strong packaging design and strong recovery systems are most effective when they work together."
Without the right recovery systems and processes in place, returning end-of-life packaging to the supply chain becomes difficult, and true circularity cannot be achieved if there are leakages in the value chain.
This highlights the value of visibility in automotive packaging today, something Robin Newing, Cummins’ returnable packaging lead, discussed with Automotive Logistics earlier this year. According to Newing, digitalisation underpins Cummins' returnable packaging programme, with RFID used to tag its fleet of returnable containers, providing real-time visibility of packaging assets.
Not only does this help prevent assets from going missing, the enhanced visibility can also help to prevent bottlenecks and shrinkage.
“We can cross reference where packaging is with our demand and make sure we get it to suppliers in the right quantities at the right time,” Newing explained.
At ALSC UK in June this year, Newing and Lucie Dobeer, executive outreach director at Unipart, shared how, through a collaborative partnership, their two companies have been working together towards the goal of creating a shared returnable network spanning multiple manufacturers, while Cummins aims to transition from using 75% single use plastic to instead using 75% reusable packaging.
"We want to help other OEMs… because it saves cost, time, carbon – but most importantly, it is right for the environment," said Dobeer.
The partnership, which began with conversations arising from Automotive Logistics' ALSC Europe conference last year, highlights how companies in the automotive supply chain can work together to make packaging in the sector more sustainable, efficient and economical, while contributing to a more circular, closed-loop economy.
