A circular economy promises to move beyond the current take-make-dispose industrial model to build long-term environmental resilience, while at the same time generating business and economic opportunities. Research by TNO shows that at least €7 billion can be earned and over 50,000 jobs created each year in the Netherlands alone through a transition to a regenerative system. A key to boosting the circular economy lies with public procurement. They stimulate and create the demand for circularly produced goods.
To stimulate the consumption of more ‘circular’ goods and services, the Dutch government launched a Green Deal for Circular Procurement in 2013.
The programme helps with setting up a public-private partnership. It brings together businesses, civil society organisations and public bodies and encourages them to enter new purchasing arrangements inspired by circular principles, such as:
- innovative contract forms that promote ‘usership’ rather than ownership, eg. product-service systems, performance contracts or pay-per-use contracts;
- buy-back contracts, whereby the supplier agrees to take back goods at the end of their useful life for the purchaser. This is most suitable for products that can be repaired and resold;
- sell-on contracts, within which the onward sale of goods to a third party for re-use or recycling is already specified at point of purchasing.
All organisations that sign up to the Green Deal for Circular Procurement are committed to participating in at least two circular procurement projects each. They must also commit to incorporate circular principles within their procurement guidelines.
An important element is the learning network, coordinated by a consortium of Dutch partners that administer the Green Deal. Here participating organisations attend group meetings, initially to learn about the principles of circular procurement, and later to share best practices from their projects.
Within the first three years, 45 organisations together undertook 80 circular procurement pilots. Participants included multinational companies (eg. Philips, ING bank) and public bodies with large procurement needs (eg. City of Amsterdam, Dutch Railways).
Following the success of the Dutch Green Deal, the region of Flanders in Belgium launched their own Green Deal on Circular Procurement in 2017, with help from Dutch partners.
One of the main strengths of the programme was the powerful and diverse group of organisations which signed up for the deals. This included both public and private parties, many of which oversee procurement budgets into the tens of millions of euros.
Also essential to the success was the in-depth know-how about circular procurement from the programme coordinators: MVO Nederland, NEVI, Sustainable Supplier, PIANOo and Coöperatie Circle Economy.
Though the deals were a success within the initial three year period, its real impact will only become obvious in the longer term. Many of the projects were ‘pilots’ conducted only at a small scale. The challenge is whether the organisations will choose to scale up and institutionalise circular procurement once the energy and the support of the Green Deals ceases.
The Green Deals are a well established concept, and as mentioned a Green Deal on Circular Procurement has already been replicated in Belgium. Assuming the technical know-how is available to support and facilitate, such Green Deals could be easily replicated. GML 8.