The benefits of circular public procurement

Circular public procurement can be used as a force to unlock economic, environmental, and social benefits.

Maximising value for money

By considering the whole use-cycle, from contracting to end-of-use of a product, service, or materials, circular public procurement can lead to cost and resource savings for both city governments and citizens. By taking into account how a product or service will be used throughout the contracting period, city governments can make more effective purchasing decisions in the long-run.

The City of Venlo has achieved an 18% cost saving on the procurement of cradle-to-cradle furniture for its new city hall through a buy and buy-back scheme.

Optimising resource efficiency

By procuring services such as repair, refurbishment, remanufacturing, and non-ownership models, city governments can keep product and materials in use for longer. By introducing requirements to use secondary materials in contracts and other strategies to reduce waste and pollution, city governments can promote resource efficiency, avoid waste, and foster circular flows.

When the City of Hamburg procured the refurbishment and resurfacing of one of its main roads, it included a requirement to use recycled asphalt. The project led to a 30% cost saving compared to conventional road resurfacing.

Support climate change targets

Transitioning to a circular economy is a fundamental step towards achieving the climate targets. By embedding requirements in tenders city governments can reduce emissions, increase resilience, and design more liveable cities. Examples include: prescribing the use of secondary materials for the construction of buildings and roads, preserving the embodied carbon and energy in cement, steel, plastic, and aluminium, or procuring public transport solutions that improve air quality.

The Greater London Authority Group’s Responsible Procurement Policy ensures that London’s ambitious climate, circular economy and air quality goals are given priority in procurement decisions. Working with suppliers, the GLA is identifying opportunities to reduce emissions through the sourcing of zero carbon energy and vehicles, and zero-emission vehicles, while encouraging suppliers to be more circular, including in construction projects and contracts for uniforms.

Barcelona City Council procured a service to rent 145 hybrid vehicles for Barcelona’s municipal police. It has been estimated that this contract led to an annual reduction of 51.9 tonnes CO₂ and 0.39 GWh of energy.

Protecting biodiversity

Today, more than 90% of biodiversity loss is due to the extraction and processing of natural resources. A circular economy supports the regeneration of natural systems and protects biodiversity. For example, regenerative agricultural approaches, such as agroecology, agroforestry, and managed grazing, sequester carbon in the soil and improve its health, increase biodiversity in surrounding ecosystems, and enable agricultural lands to remain productive instead of degrading over time, thereby reducing pressure to expand them. To limit biodiversity loss, city governments can avoid the procurement of unnecessary and problematic plastics, hazardous substances, and other materials that pollute the environment. They can also procure regeneratively grown materials and food from their suppliers as well as promote the creation and conservation of green spaces such as parks, forests, and rivers in and around the city.

The Western Cape Government in South Africa aims to protect biodiversity across the province through its sustainable public procurement strategy. The strategy aims to limit the impact on biodiversity of construction sites, increase the inclusion of indigenous vegetation, and buy wooden products sourced from invasive vegetation clearing projects. While not specifically named a circular strategy, the aims align with circular economy principles.

Promoting innovation

Circular public procurement can be a driver for innovation by creating demand for new, more circular, technologies, products, and services. By partnering with existing incubator or accelerator programmes, cities can become innovation hubs that attract startups and small and medium enterprises, in turn increasing the city’s economic competitiveness.

The Innovation Barn in the City of Charlotte convenes entrepreneurial businesses, and zero-waste initiatives to learn from each other and implement circular economy projects. This 3,500-square-metre space is the first of its kind in the United States.

Promoting circular jobs and skills

By procuring products and services that are produced locally, circular public procurement can contribute to local job creation, support the local economy and also provide societal benefits. Small and medium-sized companies can benefit as contracts offer them an opportunity to find markets for their innovative solutions and products, as well as promote local job creation. Circular public procurement can also empower local communities, reduce food insecurity through the strengthening of local supply chains, and improve public health.

São Paulo’s addendum to the National School Feeding Policy includes specific targets for introducing food items from family farming, and local and agroecological production in public purchases for school meals. In 2015, 1,747 family farmers benefited from USD 2 million in food acquisition contracts with the City of São Paulo, and new bids have been secured for local and organic or agroecological farming.

In Torres Vedras, a nutritionist designs healthy food menus for the school canteens. The municipality sends out a tender months before the school year starts to ensure that all the suppliers and services are in place by the time the school year starts. The municipality works directly with farmers and suppliers to ensure the freshness and quality of the food served in school canteens.