hero-image

Blog

Is circular procurement the future?

August 12, 2021

Blog

Is circular procurement the future?

August 12, 2021

hero-image

Onderwerp: Gids

Niveau: Gemiddeld

3 minuten leestijd

Procurement is the art of acquiring resources and services. The entire process is designed with a far-reaching view of the future. Yet it is often not as far-reaching as it should be.

That's where circular procurement comes in. A relatively new term within the tendering business. A term that is not yet within reach of everyone.

What is circular procurement?

Circular procurement strives-as the name suggests-to create a circular chain. The acquisition of resources and services must grow into a closed energy and material loop. Each component has a purpose, leading to little or no waste. The ways in which this is guaranteed can be divided into levels.

In the article called "What is Circular Procurement?"these levels are described in detail. For now, a short summary:
' There is a system level, a distribution chain level and a product level.
' The system level is aimed at ensuring circularity through contracts.
' The distribution chain level is aimed at suppliers having to guarantee circularity in their own systems.
' The product level is aimed at suppliers guaranteeing circularity themselves by paying attention to filtering the products.

Why is circular procurement important?

Striving for a circular world is crucial to reducing the pressure on the environment. This cannot be guaranteed by government support or environmental agencies alone. It is important that every company does its part to work toward a point of sustainability. As the demand for materials increases exponentially due to external factors (such as growth in population), so will the pressure on the earth. By choosing products that are reusable, this pressure will be evenly distributed and decrease over a longer period of time.

In Europe, circular procurement is now more relevant than ever. The European union's 'New Green Deal’ is ready to be launched; in the United States there is also talk of a ’Green New Deal’. In this deal, involved countries and states aim for 0% CO2 emissions and a circular economy by means of subsidies and regulations. Fossil fuels, linear products and/or resources are discouraged.

It can therefore be financially and morally beneficial to opt for circularity in the European tendering process.

How can circular procurement take place?

To apply circular procurement, deliberate decisions must be made at each of the previously mentioned levels (see text above). For example, there is the choice of different materials. In procurement, one can choose for virgin material (new products) or reused material (previously used). In the case of virgin material, the source and the profit of the product must also be considered. Reused is respectively better for the circular process, but may be less suitable for further processing. Then it will have to be considered whether the material is capable of being sustainable in the longer term, taking into account how it will affect the environment?
Likewise, these trade-offs need to be made for energy suppliers, systems, and the companies that perform the services.

Case study 2: Land Rover BAR team Headquarters

A good example for a successful circular procurement is that of Land Rover. Land Rover received €8.75 million in state funding to build new premises for America's Cup UK racing yacht team. This entire project would cost a combined €27 million.

At the beginning of the procurement process, Land Rover sat down with various parties. Client/occupier, Designers, Contractors, and suppliers. By involving these professionals early in the process, and having them work together, they gained new insights into material selection and the way of working. CO2 emissions and the reuse of materials were taken into account.

In the construction of the new building, 97% of the cement from the old building was reused. In addition, a great deal of energy and fuel was saved through efficient planning.

The result is that €2-2.7 million were saved in the construction of this property.

Source: www.sppregions.eu

Why circular procurement doesn't work for everyone

Although circular procurement is a nice intention, it does not (yet) work for every company. It can provide cost reduction, as in the example above, but often it can be more expensive to choose sustainable materials. This is certainly difficult for SMEs with limited start-up capital. An example would be the renovation of an existing building. No materials can be extracted from the existing building, and scarce sustainable building materials are often more expensive than less good alternatives that are in abundance.

Conclusion

Circular procurement is a process of making choices. Sometimes - it is morale over profit, and sometimes it goes hand in hand. Yet it is the future and "early adopters" will benefit from circular procurement in the long run. Especially once multiple suppliers embrace the concept. If market forces teach us anything, it is that as supply increases, prices will become more advantageous.

Procurement is the art of acquiring resources and services. The entire process is designed with a far-reaching view of the future. Yet it is often not as far-reaching as it should be.

That's where circular procurement comes in. A relatively new term within the tendering business. A term that is not yet within reach of everyone.

What is circular procurement?

Circular procurement strives-as the name suggests-to create a circular chain. The acquisition of resources and services must grow into a closed energy and material loop. Each component has a purpose, leading to little or no waste. The ways in which this is guaranteed can be divided into levels.

In the article called "What is Circular Procurement?"these levels are described in detail. For now, a short summary:
' There is a system level, a distribution chain level and a product level.
' The system level is aimed at ensuring circularity through contracts.
' The distribution chain level is aimed at suppliers having to guarantee circularity in their own systems.
' The product level is aimed at suppliers guaranteeing circularity themselves by paying attention to filtering the products.

Why is circular procurement important?

Striving for a circular world is crucial to reducing the pressure on the environment. This cannot be guaranteed by government support or environmental agencies alone. It is important that every company does its part to work toward a point of sustainability. As the demand for materials increases exponentially due to external factors (such as growth in population), so will the pressure on the earth. By choosing products that are reusable, this pressure will be evenly distributed and decrease over a longer period of time.

In Europe, circular procurement is now more relevant than ever. The European union's 'New Green Deal’ is ready to be launched; in the United States there is also talk of a ’Green New Deal’. In this deal, involved countries and states aim for 0% CO2 emissions and a circular economy by means of subsidies and regulations. Fossil fuels, linear products and/or resources are discouraged.

It can therefore be financially and morally beneficial to opt for circularity in the European tendering process.

How can circular procurement take place?

To apply circular procurement, deliberate decisions must be made at each of the previously mentioned levels (see text above). For example, there is the choice of different materials. In procurement, one can choose for virgin material (new products) or reused material (previously used). In the case of virgin material, the source and the profit of the product must also be considered. Reused is respectively better for the circular process, but may be less suitable for further processing. Then it will have to be considered whether the material is capable of being sustainable in the longer term, taking into account how it will affect the environment?
Likewise, these trade-offs need to be made for energy suppliers, systems, and the companies that perform the services.

Case study 2: Land Rover BAR team Headquarters

A good example for a successful circular procurement is that of Land Rover. Land Rover received €8.75 million in state funding to build new premises for America's Cup UK racing yacht team. This entire project would cost a combined €27 million.

At the beginning of the procurement process, Land Rover sat down with various parties. Client/occupier, Designers, Contractors, and suppliers. By involving these professionals early in the process, and having them work together, they gained new insights into material selection and the way of working. CO2 emissions and the reuse of materials were taken into account.

In the construction of the new building, 97% of the cement from the old building was reused. In addition, a great deal of energy and fuel was saved through efficient planning.

The result is that €2-2.7 million were saved in the construction of this property.

Source: www.sppregions.eu

Why circular procurement doesn't work for everyone

Although circular procurement is a nice intention, it does not (yet) work for every company. It can provide cost reduction, as in the example above, but often it can be more expensive to choose sustainable materials. This is certainly difficult for SMEs with limited start-up capital. An example would be the renovation of an existing building. No materials can be extracted from the existing building, and scarce sustainable building materials are often more expensive than less good alternatives that are in abundance.

Conclusion

Circular procurement is a process of making choices. Sometimes - it is morale over profit, and sometimes it goes hand in hand. Yet it is the future and "early adopters" will benefit from circular procurement in the long run. Especially once multiple suppliers embrace the concept. If market forces teach us anything, it is that as supply increases, prices will become more advantageous.

Vergelijkbare blog's