Circular procurement

Circular procurement is a form of government procurement that supports the transition to a circular economy. This approach builds on the principles of sustainable procurement by integrating elements such as the closed-loop use of materials.^[1] It is achieved by purchasing goods and services that minimize waste and use of virgin resources through models such as shared ownership, refurbishment of existing assets, and the acquisition of products containing recycled materials. Additionally, circular procurement considers the end of a product's lifecycle, ensuring materials can be reused beyond their initial application.^[2]

Policy Context

The European Union (EU) Circular Economy Action Plan is a program aimed at enhancing the sustainability of product life cycles.^[3] The plan identifies public procurement as a factor in the transition towards a circular economy and outlines measures for the European Commission to promote circular economy principles in Green Public Procurement (GPP). These measures emphasize circular attributes in revised or newly established EU GPP criteria.

Circular public procurement also contributes to the Sustainable Development Goals (SDGs), as outlined by the United Nations 2030 Agenda for Sustainable Development.^[4] Specifically, SDG 12 – Responsible Consumption and Production – includes a target to promote sustainable public procurement practices in line with national policies and priorities.^[1] Various countries, regions, and cities are also developing circular strategies, highlighting public procurement as a mechanism to scale up the transition to a circular economy.^[1]

Three Levels of Circular Procurement

The following three models or levels can be applied to implement circular procurement:^[5]

• System Level: Focuses on contractual methods that enable circularity, such as supplier take-back agreements or product-as-a-service models.
• Supplier Level: Pertains to how suppliers incorporate circularity into their systems and processes to align their products and services with circular procurement criteria.
• Product Level: Concentrates on the products that public authorities procure, which suppliers might source further down the supply chain.

Benefits

In addition to supporting sustainable procurement, circular procurement considers the entire product life cycle – from initial procurement to end of life – and can generate financial benefits. Further advantages include reduced environmental impact and a closed-loop system with potential for full recovery and minimal landfill waste.^[6] In 2014 it was estimated that by 2025, circular procurement could add $1 trillion to the global economy and create 100,000 jobs worldwide.^[7]