Circular procurement

Circular procurement refers to the acquisition of products and services that follow circular economy principles, aiming to extend product life cycles and minimize waste. Circular procurement may involve acquiring goods and services designed for longevity or reuse, including shared-use models, the refurbishment of existing assets, and products containing recycled materials.[1]

According to the United Nations Environment Programme (UNEP), the practice emphasizes the design, production, use, reuse, and recycling of products, with the goal of maximizing value both during their use and at the end of their life cycle. Circular procurement aims to reduce waste and improve resource efficiency within procurement processes.[2] Circular procurement is often considered an aspect of sustainable procurement[3] and can be integrated into supply chain management[4] or public procurement frameworks.

Policy

Circular public procurement contributes to the Sustainable Development Goals (SDGs) outlined by the United Nations in the 2030 Agenda for Sustainable Development.[5] In particular, SDG 12, Responsible Consumption and Production, includes a target to promote sustainable public procurement practices in line with national policies and priorities.[6] Numerous countries, regions, and cities are developing circular strategies, positioning public procurement as a key mechanism to support and scale the transition to a circular economy.[6]

The European Union Circular Economy Action Plan is a policy framework designed to address the environmental and resource impacts associated with the entire life cycle of products.[7]

Circular procurement can be implemented at several levels:[8]

  • System level: Involves contractual approaches that support circular practices, such as supplier take-back agreements or product-as-a-service models.
  • Supplier level: Relates to how suppliers integrate circular practices into their systems and processes to ensure that their products and services meet circular procurement criteria.
  • Product level: Focuses on the specific products procured by public authorities, including items sourced further down the supply chain.

Objectives and outcomes

Circular procurement is central to the objectives of the circular economy within supply chain management.[9][10] In 2014, it was estimated that the adoption of circular procurement practices could contribute approximately $1 trillion to the global economy and generate around 100,000 jobs worldwide by 2025.[11] Additionally, a study conducted in China suggests that circular procurement can reduce costs and improve overall financial performance.[12]

A 2025 market analysis reported that the circular economy market had grown by an average of 43% annually since 2020.[13] Adoption rates are highest in European markets at 38%, followed by the Asia-Pacific (APAC) region at 27% and North America at 19%. By industry, the manufacturing, consumer goods, and technology sectors demonstrate the greatest implementation of circular economy practices, with 64% of Fortune 500 manufacturers incorporating circular principles into core operations.[14] Data from 2024–2025 further suggest that businesses adopting circular economy strategies experience an average profit margin increase of 23% within the first three years.

Criticism

A 2024 study examining circular procurement in the Chinese manufacturing sector found that its impact on environmental performance was relatively limited.[15]

In the construction industry, barriers to the adoption of circular procurement can be categorized as hard or soft. Hard barriers include the absence of circular design practices, reverse logistics systems, standardized frameworks, and business models, while soft barriers encompass limited stakeholder engagement, lack of trust, and resistance to organizational change.[16]

Identified risks include vulnerability to greenwashing and insufficient assessment of environmental and social impacts.[17][18][19]

Practical barriers may include high infrastructure costs, the absence of standardized definitions or enforcement mechanisms, and limited scalability beyond pilot projects. Additional challenges involve overcoming the prevailing perception that circular practices could hinder the economic or material development of a region.[20]

References

  1. ^ Sajid, Zeerak Waryam; Aftab, Usman; Ullah, Fahim (2024-12-01). "Barriers to adopting circular procurement in the construction industry: The way forward". Sustainable Futures. 8 100244. doi:10.1016/j.sftr.2024.100244. ISSN 2666-1888.
  2. ^ Xu, Linqi; Jia, Fu; Yan, Fangxu; Chen, Lujie (2022-09-10). "Circular procurement: A systematic literature review". Journal of Cleaner Production. 365 132845. doi:10.1016/j.jclepro.2022.132845. ISSN 0959-6526.
  3. ^ Public procurement for a circular economy: Good practice and guidance. EU Commission. 2017. Content is copied from this source, which is © European Union, 1995-2018. Reuse is authorised, provided the source is acknowledged.
  4. ^ Farooque, Muhammad; Zhang, Abraham; Choi, Tsan-Ming; Hartley, Janet L.; Liu, Yanping (2024-10-01). "Antecedents and performance outcomes of circular procurement: An empirical study in China". Journal of Purchasing and Supply Management. 30 (4) 100882. doi:10.1016/j.pursup.2023.100882. ISSN 1478-4092.
  5. ^ "Transforming our world: the 2030 Agenda for Sustainable Development | Department of Economic and Social Affairs". sdgs.un.org. Retrieved 2025-05-29.
  6. ^ a b Public procurement for a circular economy: Good practice and guidance. EU Commission. 2017. Content is copied from this source, which is © European Union, 1995-2018. Reuse is authorised, provided the source is acknowledged.
  7. ^ Sajid, Zeerak Waryam; Aftab, Usman; Ullah, Fahim (2024-12-01). "Barriers to adopting circular procurement in the construction industry: The way forward". Sustainable Futures. 8 100244. doi:10.1016/j.sftr.2024.100244. ISSN 2666-1888.
  8. ^ Mervyn Jones, Iben Kinch Sohn, Anne-Mette Lysemose Bendsen (2017). Circular Procurement Best Practice Report (PDF). ICLEI Europe. Archived from the original (PDF) on January 19, 2022.
  9. ^ Xu, Linqi; Jia, Fu; Yan, Fangxu; Chen, Lujie (2022-09-10). "Circular procurement: A systematic literature review". Journal of Cleaner Production. 365 132845. doi:10.1016/j.jclepro.2022.132845. ISSN 0959-6526.
  10. ^ Qazi, Asad Ali; Appolloni, Andrea (2022-09-01). "A systematic review on barriers and enablers toward circular procurement management". Sustainable Production and Consumption. 33: 343–359. Bibcode:2022SusPC..33..343Q. doi:10.1016/j.spc.2022.07.013. ISSN 2352-5509.
  11. ^ Ellen Mac Arthur Foundation, McKinsey. "Towards the Circular Economy: Accelerating the scale-up across global supply chains" (PDF). World Economic Forum.
  12. ^ Farooque, Muhammad; Zhang, Abraham; Choi, Tsan-Ming; Hartley, Janet L.; Liu, Yanping (2024-10-01). "Antecedents and performance outcomes of circular procurement: An empirical study in China". Journal of Purchasing and Supply Management. 30 (4) 100882. doi:10.1016/j.pursup.2023.100882. ISSN 1478-4092.
  13. ^ "Circular Economy 2025: 8 Game-Changing Market Intelligence Insights for Business Leaders". November 4, 2025.
  14. ^ "Circular Economy 2025: 8 Game-Changing Market Intelligence Insights for Business Leaders". www.researchandmetric.com. 2025-11-04. Retrieved 2026-03-13.
  15. ^ Farooque, Muhammad; Zhang, Abraham; Choi, Tsan-Ming; Hartley, Janet L.; Liu, Yanping (2024-10-01). "Antecedents and performance outcomes of circular procurement: An empirical study in China". Journal of Purchasing and Supply Management. 30 (4) 100882. doi:10.1016/j.pursup.2023.100882. ISSN 1478-4092.
  16. ^ Sajid, Zeerak Waryam; Aftab, Usman; Ullah, Fahim (2024-12-01). "Barriers to adopting circular procurement in the construction industry: The way forward". Sustainable Futures. 8 100244. doi:10.1016/j.sftr.2024.100244. ISSN 2666-1888.
  17. ^ Tátrai, Tünde; Diófási-Kovács, Orsolya (2021-09-01). "European Green Deal – the way to Circular Public Procurement". ERA Forum. 22 (3): 523–539. doi:10.1007/s12027-021-00678-2. ISSN 1863-9038.
  18. ^ Khan, Owais; Hinterhuber, Andreas (2025-04-03). "An experimental study on the susceptibility of purchasing managers to greenwashing". Scientific Reports. 15 (1): 11426. doi:10.1038/s41598-025-94482-4. ISSN 2045-2322. PMC 11968802.
  19. ^ Granickas, Karolis (2020-07-14). "How to tell green procurement from greenwashing". Open Contracting Partnership. Retrieved 2025-11-28.
  20. ^ "Against wasted politics: A critique of the circular economy | Ephemeral Journal". ephemerajournal.org. Archived from the original on 2025-09-09. Retrieved 2026-01-25.

Further reading

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