More circularity helps manufacturer meet sustainability goals

Industrial manufacturer Phinia has embedded sustainability goals deeply into its operations, centering on a shift to a circular manufacturing model that has helped reduce both carbon emissions and costs.

Phinia, based in Auburn Hills, Mich., focuses primarily on producing fuel systems, electronics and aftermarket components for several industries. The company is publicly traded on the New York Stock Exchange after being spun out from global automotive supplier BorgWarner in 2023.

Phinia's primary focus is the automotive industry, offering components for light passenger vehicles. But it's now making a strategic push into other commercial vehicle and industrial markets, including marine, aerospace and stationary power generation, like data center power units. It operates over 20 manufacturing plants in North America, South America, Europe and Asia.

The company's portfolio includes components like fuel injectors -- diesel injectors or gasoline direct injectors -- high-pressure fuel pumps and a pressure rail that provides on-demand fuel for the injectors. It also offers engine control units and a software system for integration and calibration.

Sustainability goals a top priority

Sustainability is a top priority for Phina, according to Todd Anderson, the company's CTO.

When Phinia was a business unit within BorgWarner, it provided information on energy-use improvements, recycling and waste reduction that became part of BorgWarner's sustainability reports, he said. This continued with Phinia's own sustainability reports after the spin-off.

"When we became Phinia, it's the first time that we took over and did our own [sustainability reporting]," Anderson said. "It felt like we had a seat at the big boys' table too, in a positive way."

Phina's sustainability goals center primarily on reducing Scope 1 and Scope 2 carbon emissions. It also has goals for the three sustainability frameworks: environmental, social and governance.

"We started when we put our first sustainability report together with governance that begins with our board of directors," Anderson said. "Then we have the sustainability committee that crosses functions for us to be able to put that into place."

Getting smart about energy usage

A key to reducing Phinia's Scope 1 and Scope 2 emissions has been improving energy usage through several measures. This enabled a 3% decrease in energy consumption in 2025, even as the company increased production, Anderson said.

Phinia has also installed smart meters on machines across its plants for greater control over energy usage.

"It also may sound quite simple, but when a machine isn't being used, we find out if we have the monitoring system, the metering system and the control to be able to turn it off and power down that equipment," he said.

The smart meters are primarily retrofitted onto existing manufacturing equipment, and if the company needs to invest in new equipment, the monitors are included in the specifications. A supervisory control and data acquisition, or SCADA, software system monitors and controls machines from the plant level.

Measures like this have reduced Phinia's emissions by reducing energy use across manufacturing plants. Other sustainability improvements include reduced natural gas usage and more green energy procurement, as the company purchases more energy from sustainable sources.

While there was no single big lever, there were a lot of little things done across each of the plants on a day-to-day basis where everything just adds up.

According to its 2025 sustainability report, Phinia achieved a 35% year-on-year improvement  in reduced CO2 emissions compared to to 2024.

"That's significant. While there was no single big lever, there were a lot of little things done across each of the plants on a day-to-day basis where everything just adds up," Anderson said.

Manufacturing is a closed-loop circle

To meet its sustainability goals, Phinia has also adopted circular manufacturing and remanufacturing practices.

Circular manufacturing replaces the traditional linear manufacturing model with a closed-loop approach that emphasizes eliminating waste and reusing materials. One of its core principles is that products are designed for their longest possible use and for remanufacturing at the end of product life. This means the products are designed for simpler maintenance and easy disassembly, so Phinia can reuse those components, recycle them if possible or dispose of them responsibly.

The approach has both sustainability and business benefits. For sustainability, circular manufacturing helps companies use fewer raw materials and lower carbon emissions by reducing material processing and waste incineration.

Business benefits include lower costs from reduced reliance on new raw materials and components, reduced waste disposal fees, protection against supply chain disruptions and new potential revenue streams using product-as-a-service models. It can also help with regulatory compliance and enhanced brand reputation as a company that follows sustainable practices.

Circularity starts at the beginning of the manufacturing process for Phinia, Anderson said.

The company now embeds circularity at the product design stage, making design-for-environment an aspect of design review alongside traditional elements such as performance and cost, he said. It's important to include this at the start, as it's difficult, if not impossible, to add environmental considerations later in the product lifecycle.

"By baking it in right at the foundation of the product design, we've found that it doesn't become an afterthought like, 'Now, here's this product. How do we make it greener?'" Anderson said. "So, we put that right in as part of the design considerations as we go forward, and it helps us address things at a fundamental level."

Weighty decisions

In 2024, Phinia selected and piloted a dedicated lifecycle assessment tool that evaluates environmental impact across the full product lifecycle. This begins with raw material sourcing and manufacturing, and follows through production, distribution and into the product's end-of-life.

"That's been an important step. It's not a silver bullet magic answer, but it does give us a framework with which to have the conversation internally. It presents data that we can use to make thoughtful evaluations and decisions," Anderson said.

Reducing the materials and components used in products is critical to the manufacturing lifecycle. For example, Phinia is examining ways to use new materials that reduce weight but retain the same strength. One of these is an alternative material for a component that reduces the overall product carbon footprint by 30%, according to the Phinia sustainability report.

The company conducted a lifecycle analysis of an evaporative canister used in a gasoline direct-inject fuel system and found that the material used for the canister's body was Nylon 6-6. The analysis showed this material accounted for almost 50% of the product's overall carbon footprint.

"We thought this was a good area to target. It's not like we were tackling something that's 2% of the problem -- we've got one component that's a significant portion," Anderson said.

Using material research, the manufacturing sustainability team identified an alternative material that met the strength and weight ratio the product required, but could reduce the material carbon footprint by 50%, he said.

"At an overall product cost, that results in about 30% carbon reduction for that product by tackling a different material that still meets our requirements [and] has a lower carbon footprint in that large component," Anderson said.

Recycling and remanufacturing

The end of the product lifecycle is part of the sustainability story, too, and Phinia includes recycling and remanufacturing in the circular manufacturing process. Phinia works with its customers to disassemble parts and recycle appropriate materials. It also uses remanufacturing for critical components, a process that's only possible because the products were designed to be opened and disassembled, Anderson said.

For performance reasons, some products must be welded together, making them more difficult to salvage or remanufacture. However, Phinia assembles commercial vehicle fuel injectors together so they can be disassembled and remanufactured, reducing energy by 40% and CO2 by 50% per unit.

Reusing a nozzle valve assembly in fuel injectors means Phinia doesn't need to procure raw materials for the assembly and the associated emissions generated from the transportation, Anderson said.

"We're leveraging the CO2 that's already gone into the first nozzle," he said. "We're adding a little bit to clean and refurbish it, but we end up with a remanufactured product that has a much lower carbon footprint than something new."

All CO2 emissions that would have occurred during the production and transportation of new products are taken out of the Scope 2 emissions in the sustainability report.

The business case for sustainability

While improved sustainability is a worthy goal in and of itself, Phinia's pursuit of its sustainability goals has real business impacts. Everything the company does for sustainability is based on a business case and looking at the effects of implementing those measures, Anderson said.

"In the business case, certainly financially, we need to understand what the impact is, and we assess the impact on the environment as part of that business," he said.

For example, reducing energy use leads to some financial savings. It also has associated costs, such as adding smart meters onto every piece of equipment. But the upfront investment yields long-term benefits through reduced energy use.

"Our payback may be a little bit extended, but we've run that through our financial hurdles to evaluate that. We do look at that and try to be thoughtful about balancing all those aspects," Anderson said.

Jim O'Donnell is a news director for TechTarget, where he covers IT strategy and enterprise ESG.