-- Participants’ Handout --This document is designed to accompany Module 5 of the European Commission’s Green Public

Procurement (GPP) Training Toolkit on GPP & the Circular Economy. It provides additional notes, references and examples to the information presented in the Module. The complete

toolkit can be found on the European Commission’s GPP website:

http://ec.europa.eu/environment/gpp/index_en.htm

How procurement relates to the circular economyValuable materials are leaking from our economies. In a world where demand and competition for finite and sometimes scarce resources will continue to increase, and pressure on resources is causing greater environmental degradation and fragility. A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life. Circular economy systems keep the added value in products for as long as possible and eliminate waste. They keep resources within the economy when a product has reached the end of its life, so that they can be productively used again and again and hence create further value. Transition to a more circular economy requires changes throughout value chains, from product design to new business and business models1.

The concept of the circular economy has been around for nearly 50 years in various forms e.g. Closing the Circle and Cradle to Cradle.

1 Towards a circular economy: A zero waste programme for Europe. European Commission COM(2014) 398

GPP Training toolkitModule 5: GPP & the Circular Economy

GPP Training toolkit - Module 5: GPP & the Circular EconomyAccording to the European Commission, every year, over 250 000 public authorities in the EU spend around 14% of GDP on the purchase of services, works and supplies. The amounts to around €1.9 trillion that goes into national public procurement budgets annually2. Public procurement spending therefore has a significant role in accelerating our transition to a more circular economy in the way that we procure our goods and services at a national level.

Circular public procurement is an approach to greening procurement which recognises the role that public authorities can play in supporting the transition towards a circular economy. Circular procurement can be defined as the process by which public authorities purchase works, goods or services that seek to contribute to closed energy and material loops within supply chains, whilst minimising, and in the best case avoiding, negative environmental impacts and waste creation across their whole life-cycle3.

Main Takeaways

Circular economy applies to nutrient as well as technical material flows. Retaining value follows the basic waste hierarchy principles. Public procurement is a powerful lever for delivering circuar economy benefits. Whole Life thinking - considering circularity in procurement doesn’t just focus on tendering Circular procurement considers how the product or service will be used and disposed of (after

current life) as well as where it came from, what is is made from and how it is made.

Benefits of the circular economyIn 2015 the Ellen MacArthur Foundation published a study that provided evidence that a European circular economy could grow resource productivity by up to 3 percent annually. This would generate a primary resource benefit of as much as €0.6 trillion per year by 2030 to Europe’s economies. In addition, it would generate €1.2 trillion in non-resource and externality benefits, bringing the annual total benefits to around €1.8 trillion versus today. This would translate into a GDP increase of as much as 7% relative to the current development scenario, with additional positive impacts on employment.

The Commission’s Factsheet4 on the circular economy action plan states the following benefits:

Savings of €600 billion for EU businesses, equivalent to 8% of their annual turnover. Creation of 580,000 jobs. Reduction of EU carbon emissions by 450 million tonnes by 2030.

Main Takeaway

Live projects are confirming the economic and social benefits of a circular economy modelled through numerous studies.

2 https://ec.europa.eu/growth/single-market/public-procurement_en 3 Public procurement for a circular economy. European Commission 20174 https://ec.europa.eu/commission/sites/beta-political/files/circular-economy-factsheet-general_en.pdf

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GPP Training toolkit - Module 5: GPP & the Circular EconomyProcurement cycle opportunitiesCircular procurement requires an understanding of not just what products are made from and where they have come from, but also how they will be used and what happens to them after their first life. In many respects, the procurement cycle mirrors the waste hierarchy. Therefore, the greatest opportunities for reducing the environmental impacts and maximising the economic and social impacts within the cycle are in the early procurement stages.

Challenging the need can also consider the potential to adopt alternative, more circular, models to ownership.

Circular business models5 have the ability to transform industries. The need to be more innovative with producing, using and disposing of products is more critical than ever with our diminishing global resources. Encouraging more circular business models through procurement will:

Enable more products to be recycled and re-used – steering precious materials and re-useable products away from landfill sites. A much better solution for the environment as well as for businesses.

Reduce costs – by enabling more durable products to be purchased more cost effectively optimised over their functional lifetimes.

Increase resilience and innovation – through offering innovative services post product purchase or by offering alternative purchasing options such as hire/leasing.

Enable the supply chain to be proactive – in resolving the resource crisis and, therefore, avoiding unnecessary regulatory burdens.

Enable businesses to take more control over sourcing and use of raw materials. Enable purchasers and businesses to build stronger relationships across more resilient supply

chains.

Circular products require circular clients. Circular procurement requires all those involved in the procurement cycle to think about the whole life consequences of their purchasing decisions.

Main areas to focus on in terms of procurement are:

Avoidance - reducing consumption Reuse - considering options for purchasing reused or remanufactured items Encouraging markets for secondary materials, e.g. by specifying recycled content in new

products Encouraging innovation for more circular products (and services) Optimising the lifetime of products through repair and maintenance or servicing contracts and

sell-on options Considering end-of-life options that help close product e.g. through take-back.

5 Also referred to as Resource Efficient Business Models (REBMs)

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Challenging the needThe early stages of the procurement cycle provide the opportunity to challenge the need and adopt different approaches and more circular business models by asking questions, for example:

Do you need vehicles or mobility?

Do you need light (pay per lux) or lighting equipment?

GPP Training toolkit - Module 5: GPP & the Circular Economy

Main Takeaways

Whole Life thinking - considering circularity - in procurement doesn’t just focus on tendering. Circular procurement considers how the product or service will be used and disposed of (after

current life) as well as where it came from, what it is made from and how it is made. The largest sustainability gains are made before specifications are fixed. Challenge the need, e.g. mobility instead of new vehicles.

Stakeholder engagement Circular procurement and whole-life thinking require collaboration with a wide range of internal stakeholders, e.g. senior decision makers, budget holders, finance, procurement team, users etc) and external stakeholders (e.g. suppliers and supply chain) is critical in implementing a circular approach to procurement.

The circular procurement options and solutions vary from product category to product although he underlying principles remain the same. Market engagement is an important tool in assessing not just the current capacity of the market to deliver circular solutions, but also its future potential. This means communicating your ambition and understanding the maturity of the market and its capability of suppliers to deliver that ambition. This helps to accelerate the delivery more circular solutions, products and services.

Strategic procurement provides the opportunity to signal circular ambitions to the market and encourage supply chains and markets to improve performance over a period of time. This requires a collaborative approach.

There are 4 simple steps for collaboration that can be followed:

• Identifying the relevant stakeholders. • Mapping their interest and influence

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GPP Training toolkit - Module 5: GPP & the Circular Economy

• Engaging with stakeholders, e.g. to identify current capabilities and potential to offer alternatives (e.g. more circular products, business models etc).

• Communication, e.g. through pre-competitive dialogue, with markets and potential suppliers.

Main Takeaways

Some product category markets are more advanced and therefore more able to deliver circular solutions now.

Public procurement can help build capacity and encourage other markets to offer more circular solutions.

Pre-competitive dialogue helps communicate circular ambitions and understand what the market is capable of offering.

Category examplesOpportunities to close product and material loops through Green public Procurement vary from product to product and category to category. Some categories represent ‘quick wins’ as they are lower risk, or are less technical products, or have more mature markets capable of responding to more circular client requirements.

Undertaking a prioritisation exercise helps to identify categories and products that match the ambition set within a circular procurement strategy.

Workwear & textiles (Slide 10)Public sector spending has significant potential to influence corporate wear and workwear & textiles provide good opportunities for lifetime extension (re-use) and fibre recovery (recycling).

The design and specification of products (e.g. uniforms) can have a major influence on reuse and recycling options, e.g. removable versus sewn on labels. Requirement for recycled content can encourage markets for recycled fibres and help close material loops.

ICT & electricals (Slide 11) Global supply chains, complex product design and multiple components make can reduce the potential to influence design of more circular electrical products but there are still some ‘quick win’ options, notably:

• Specifying recycled content, e.g. in product casings and components (plastic), helps create demand for secondary materials

• Lifetime optimisation – encouraging the purchase of reused items where available and fit for purpose

• Encouraging take-back or sell-on options that enable product lifetimes to be optimised (e.g. smart

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Extending the lifespan of work wear in Herning, Denmark

In 2013, Herning Municipality sought to procure new uniforms for its technical operations department, with the aim of extending their lifespan and more efficient use. To do so, it developed technical specifications and contract performance clauses related to maintenance, repair and recycling. By leasing uniforms through a service model, and including reuse and recycling contract provisions, it was possible to extend the lifespan of the uniforms, saving an estimated €6,700 and 1,011 tonnes of CO2 emissions over four years.

More information available at:

http://ec.europa.eu/environment/gpp/pdf/news_alert/Issue65_Case_Study_131_Herning.pdf

GPP Training toolkit - Module 5: GPP & the Circular Economy

phones typically have functional lifetimes of over 4 years but are replaced on average every 21 months)

• Third party collection and re-use arrangements can also be encouraged at end-of-life that enable assessment and preparation for reuse before recycling

• Where recycling is the only alternative (e.g. for data security reasons) then optimising recovery of precious metals (platinum group metals) and critical raw materials will help reduce dependency on scarce materials.

ICT also provides the potential to consider, encouraging and adopt new business models through procurement, e.g. lighting as a service, as innovative and more circular approaches.

Construction (Slide 12)The long-term nature of construction projects (buildings and infrastructure) means that this sector is more complex but equally more mature in terms of life cycle thinking. Procurement has significant potential to encourage waste reduction and design stage opportunities (e.g. design for deconstruction, setting recycled content targets) to close both product and material loops.

Construction projects also have multiple business models for delivery. Some of these are more circular than others. Some, like rapid circular contracting (Netherlands) have been designed specifically with circular economy principles in mind.

Utilising building space is also a key circular economy principle (e.g. Growth Within: Europe, EMF, 2015) and procurement can help link the construction and the occupation phases, e.g. through Building Information Management (BIM) can provide more circular outcomes.

Building and infrastructure lifetimes can be extended through refurbishment and this can be planned and procured with circular principles in mind. Procurement can also link demolition to newbuild enabling many of the recycled materials from the demolition to be reincorporated in the newbuild phase.

Furniture (Slide 13)Considering need can lead to a reduced demand for products, e.g. the purchasing of hospital mattresses within the health service (Cambridge National Health Trust). Office furniture (e.g. desks, chairs and storage) can provide quick wins in terms of:

• Re-use and remanufacturing of existing furniture (e.g. Public Health Wales and Swansea City Council, Wales)

• Creating social benefits through the employment of social enterprises (jobs and skills training etc); and

• Designing out dependency on non-recyclable materials (e.g. ProRail/Gispen, Cradle to Cradle - C2C - products).

Consideration should also be given to specifying recycled content in both furniture items and carpets (e.g. carpet tiles) to encourage markets for secondary materials. Better management and tracking of mobile assets (such as office furniture) can also improve utilisation rates and help optimise product lifetimes.

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GPP Training toolkit - Module 5: GPP & the Circular EconomyFood & catering (Slide 14)There are two aspects to food and catering:

Closing the nutrient loop (e.g. food and food waste)

Packaging – food packaging and secondary packaging

Procurement decisions and choices (e.g. healthier diet requirements, waste reduction initiatives and food waste composting) can all help close nutrient loops6.

Procurement choices can also have a significant impact in the reduction of packaging impacts, particularly when considering single use packaging (e.g. plastics). Packaging plays an important role in the appropriate protection of food and the prolongation of food product lifetimes. However, addressing overpackaging, specification of recycled content in packaging and collection of food packaging can all help close packaging material (e.g. plastics, paper & card etc) loops.

Prioritising product categories Circular procurement principles aim to optimise the FUNCTIONAL (or technical) lifetime of the product whether it is a short lifetime (e.g. packaging) or a long lifetime (e.g. buildings). The ease with which this can be achieved depends on a combination of technical complexity of the product versus the technical lifetime of the products. For example, a smartphone is a highly complex technical product with hundreds of components and long supply chains. In contrast, packaging items like plastic containers are relatively simple items often made of single materials and with very short lifespans (e.g. single use).

The higher the product complexity the more likely it will be harder to reuse components unless modular in design, therefore encourage lifetime optimisation of the existing product within the procurement process. The longer the technical lifetime the more likely it will be difficult to close the loop at end-of-life. Therefore, encouraging design for recyclability and lifetime optimisation (e.g. repair, remanufacturing and reuse) are useful strategies to follow during procurement. Low level complexity and lifetime typically mean reuse options are limited so use procurement to encourage collection and recycling of materials.

6 Towards the Circular Economy Vol. 1. Ellen MacArthur Foundation, 2012

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Bringing circular concepts into school catering in Turin, Italy

In 2013, the City of Turin introduced a number of measures to their school catering contract to enhance its sustainability, which included requiring the use of energy efficient appliances and low environmental impact transport, as well as significantly reducing packaging and waste, for example by using tap water instead of bottled water, and favouring reusable and refillable products where packaging is unavoidable. In addition, contractors were required to shift from using plastic to reusable dishes. This one requirement alone resulted in a reduction of 157 tonnes/year of plastic waste.

More information available at:

http://ec.europa.eu/environment/gpp/pdf/news_alert/Issue47_Case_Study100_Turin.pdf

GPP Training toolkit - Module 5: GPP & the Circular EconomyThis makes some product groups better to focus on in the early stages of implementing circular procurement than others. However, ALL product categories can benefit from circular procurement practices even if the benefits are more long term, e.g. based on whole life costing.

Some items, for example workwear, furniture and some electrical equipment & ICT are potentially useful categories to develop a strategic approach towards closing product and material loops. The Dutch Government has done this for a number of categories including furniture7.

Main Takeaways

Product categories (as well as existing markets) vary in their potential to close both product and material loops.

Products with average complexity and technical lifetimes are well suited for circular procurement quick wins (short term gains)

ConclusionsThere are three main conclusions to this module:

• The public sector with it’s €1.9 trillion annual spend on public sector goods and services plays a major role in acting as a barrier or facilitator to accelerating the delivery of the circular economy.

• Markets are dynamic and circular procurement can encourage and accelerate shifts towards the production and consumption of more circular products.

• Considering different business models alongside traditional ownership models can encourage the delivery of more circular products, e.g. through servicisation. This helps close product and material loops and deliver circular economy outcomes and benefits.

Document published: December 2018

Author: Sustainable Global Resources Ltd

7 The path towards a circular category office furniture. Turntoo. 2016

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Toolkit developed for the European Commission by ICLEI - Local Governments for SustainabilityOwner, Editor: European Commission, DG Environment, 2019

Disclaimer: This toolkit is an indicative document of the Commission services and cannot be considered binding to this institution in any way. Neither the European Commission nor any person acting on behalf of

the Commission is responsible for the use that might be made of the information in this document.