Circular procurement

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Circular procurement is an approach to government procurement that enables private and public authorities to support a transition to a circular economy. This is done by purchasing works, goods, or services designed to create closed energy and material loops within supply chains while minimizing, or avoiding, the generation of waste and other negative factors on the environment. The circular procurement approach builds on the sustainable procurement approach by adding elements such as the closed-loop use of materials.^[1]

The European Union (EU) Action Plan for the Circular Economy has implemented a comprehensive program aimed at enhancing the sustainability of product life cycles. This plan acknowledges public procurement as a significant factor in the shift towards a circular economy and outlines various measures that the European Commission will implement to promote the incorporation of circular economy principles in Green Public Procurement (GPP). These measures involve emphasizing circular attributes in revised or new sets of EU GPP criteria.

Circular public procurement also has a role in achieving the Sustainable Development Goals (SDGs), defined by the United Nations 2030 Agenda for Sustainable Development. In particular, SDG 12 – Responsible Consumption and Production – includes a specific target on promoting sustainable public procurement practices, in accordance with national policies and priorities.^[1] Furthermore, many countries, regions, and cities have been developing their circular strategies in which public procurement is often emphasized as a key mechanism for scaling up the transition to a circular economy.^[1]

There are three types or levels of models for implementing circular procurement:^[2]

• System level concerns the contractual methods the purchasing organization can use to ensure circularity. For example, supplier take-back agreements or product service systems.
• Supplier level pertains to how suppliers can build circularity into their systems and processes to ensure the products and services they offer meet circular procurement criteria.
• Product level focuses solely on the products that suppliers to public authorities may themselves procure further down the supply chain.

Besides sustainable procurement, circularity in procurement can help buyers take a more comprehensive approach – from the first stages of procurement to the end of product life – while achieving financial benefits. Other benefits of the circular procurement include reduced environmental harm and a closed loop system which has 100% recovery and a negligible landfill ratio.^[3] By 2025, at a global scale, it has an estimated potential to add $1 trillion to the global economy and create 100,000 new jobs within the next five years.^[4]

• Alhola, Katriina; Ryding, Sven- Olof; Salmenperä, Hanna; Busch, Niels Juul (February 2019). "Exploiting the Potential of Public Procurement: Opportunities for Circular Economy". Journal of Industrial Ecology. 23 (1): 96–109. doi:10.1111/jiec.12770.