R E S E A R C H A N D A N A LY S I S

Exploiting the Potential of Public

Procurement
Opportunities for Circular Economy
Katriina Alhola ,1 Sven- Olof Ryding,2 Hanna Salmenperä,1 and Niels Juul Busch3
1
Centre for Sustainable Consumption and Production, Finnish Environment Institute, Helsinki, Finland
2
Swedish Environmental Research Institute (IVL), Stockholm, Sweden
3
Copenhagen Resource Institute (NIRAS), Copenhagen, Denmark

Keywords:
Summary
circular economy
clean cycles The objective of a circular economy (CE) is to maintain the value of products, materials, and
industrial ecology resources in the economy by closing material loops and minimizing waste generation. In
public procurement recent years, the role of public procurement has been recognized as an important, but as yet
sustainability not fully exploited, opportunity by cities and municipalities in their transition toward circular
value retention
societies. This study analyzed public procurement opportunities to promote CE. Different
approaches and examples of circular public procurement were identified using case studies.
Supporting information is linked In addition, opportunities to promote CE through sustainable and green public procure-
to this article on the JIE website ment policy were identified analyzing predefined sustainable or green public procurement
criteria. The study concludes that public procurement can promote CE and related busi-
ness models by setting criteria and requirements for the extension of product life spans,
efficiency and/or intensity of use, and efficient cycling of biological or technical materials,
as well as for the securing of clean and nonrisky cycles. Circular procurement can occur
through the procurement of better-quality products in circular terms, the procurement of
new circular products, the use of business concepts that support the CE, and investments
in circular ecosystems. Several sectors and product groups were identified as having po-
tential for circular procurement, such as construction, waste, and wastewater management,
transportation, food, and catering, furniture, and textiles. The study also suggests that the
use of certain tools, such as performance-based procurement, life cycle approach, and life
cycle costing, as well as criteria concerning reuse and recycling of materials, could promote
circular procurement. Market dialogue and cooperation between procurers and actors in
the supply chains are important for the future development of circular procurement.

Introduction these challenges. Circular economy (CE) is receiving increas-

ing attention in policy agendas in many countries as a means to
Global concern about climate change, resource depletion,
overcome unsustainable production and consumption patterns,
and pollution has increased interest in energy- and resource-
while simultaneously allowing for economic growth and effi-
efficient and nonrisky material cycles as a way of mitigating
cient use of resources (Geissdoerfer et al. 2017; Winans et al.

Conflict of interest statement: The authors declare no conflict of interest.

Address correspondence to: Katriina Alhola, Finnish Environment Institute, P.O. Box 140, FIN-00251 Helsinki, Finland. Email: katriina.alhola@ymparisto.fi

© 2018 by Yale University

DOI: 10.1111/jiec.12770 Editor managing review: Michael Brown

Volume 23, Number 1

96 Journal of Industrial Ecology www.wileyonlinelibrary.com/journal/jie


2017; De los Rios and Charnley 2016; Brennan et al. 2015).
CE aims at maintaining the value of products, materials, and
resources in the economy, in circulation, for as long as possible
and minimizing the generation of waste (European Commission
2014, 2015; Ellen MacArthur Foundation 2015a; Geissdoerfer
et al. 2017). In addition, CE aims at transforming waste into
resources and bridging the gap between production and con-
sumption activities (Witjes and Lozano 2016).
It has been argued that the transition to a functioning CE
regime requires systemic multilevel change, including techno-
logical innovation, new business models, and stakeholder col-
laboration (Witjes and Lozano 2016). When extending life
spans and transforming waste into new resources, it is impor-
tant to understand the opportunities provided by new business
models, digitalization, and a regulative framework, that is, what
is considered useless waste and what is considered a raw mate-
rial. Indeed, CE provides a platform for several business models
(Ghisellini et al. 2016; European Commission 2016; Bocken
et al. 2016) in which value creation, delivery, and capture
(Osterwalder and Pigneur 2010) are based on a circular ap-
proach. These models include not only an economic value
proposition for business, but also sustainable value proposi-
tions for all stakeholders (e.g., Boons and Lüdeke-Freund 2013;
Bocken et al. 2016). New value networks and stakeholder col-
laboration are stressed as key in creating circular business models
(Bocken et al. 2016; Witjes and Lozano 2016) as they cannot
rely on smarter product design alone, but will also require the
development of related support services and recycling infras-
tructure (Reichel et al. 2016). Examples of such changes are
leasing, hiring, and sharing of products, as opposed to direct
ownership. However, future business models can be radically
different compared to previous models, meaning that consumers
may also need to change their current habits. (Antikainen et al.
2015)
Public procurement, accounting for on average 14% of
gross domestic product (GDP) in the European Union (EU)
annually (European Commission 2016), is increasingly seen as
offering significant opportunities to promote the transition to
CE (Ellen MacArthur Foundation 2015b). It could, for exam-
ple, spread innovative solutions and create markets for clean
solutions, especially in waste prevention, material efficiency,
and recycling, such as smart waste management systems and
reuse of materials and products manufactured from secondary
(recycled) raw materials (European Commission 2014). In
recent years, EU-wide policies have also promoted this aim
(European Commission 2015) and national action plans have
set targets that stimulate circular procurement, for example,
targets for waste reduction and recyclability (e.g., Sitra 2016).
One of the most important changes is the new EU Directive
on Public Procurement (Directive 2014/24/EU), which now
allows procurement and pricing criteria to be set based on
a life cycle perspective (Directive 2014/24/EU (92); Dragos
and Neamtu 2013). This may help incorporate environmental
criteria into all phases of a product’s life cycle and ensure that
the external costs of environmental degradation are taken into
account.
Alhola et al., Public procurement promoting circular economy
R E S E A R C H A N D A N A LY S I S
Green public procurement (GPP) and sustainable public
procurement (SPP) in particular have come to be considered
important market-based instruments that offer enormous po-
tential in terms of achieving the environmental and social ob-
jectives of a resource efficient society (Darnall et al. 2017; Testa
et al. 2016; Nash 2009; Walker and Phillips 2009; McCrudden
2004; Mastny, 2003; Carter et al. 2000) and creating markets
for sustainable solutions (European Commission 2010, 2016;
Larsen and Svane 2005; Swanson et al. 2005; Erdmenger 2003).
SPP entails purchasing agencies taking into account the eco-
nomic, social, and environmental pillars of sustainable devel-
opment in their purchasing processes, and public procurement
is referred to as “green” when purchasers pay attention to en-
vironmental aspects (European Commission 2007; Walker and
Brammer 2009). GPP is “a process whereby public authorities
seek to procure goods, services and works with a reduced envi-
ronmental impact throughout their life cycle when compared to
goods, services and works with the same primary function that
would otherwise be procured” (European Commission 2008, 4).
Thus, in supporting the objectives of sustainable procurement,
GPP is an important contributor to the initiatives for promot-
ing the general goal of sustainable development (Nash 2009;
Walker and Phillips 2009; McCrudden 2004; Mastny 2003;
Carter et al. 2000).
Traditionally, the mechanism behind SPP and GPP has been
the establishment of certain environmental criteria in the ten-
dering process, which requires the identification of these aspects
(Uttam and Roos 2015; Sarkis et al. 2012; Michelsen and de
Boer 2009; Swanson et al. 2005; Siemens 2003; Erdmenger
2003). The academic literature on GPP has also focused on the
development and use of environmental criteria in the procure-
ment process, as well as on related tools (Testa et al. 2016; Bratt
et al. 2013; Walker and Brammer 2012; Tarantini et al. 2011).
In addition, the EU’s common GPP criteria and GPP criteria at
national level have been developed for several product groups,
which could help procuring units to buy products with higher
circular status. It could therefore be said that circular elements
are already being realized to some extent in these product groups
through the existing mechanisms of sustainable and green pub-
lic procurement. However, there is no evidence on how well
these SPP and GPP criteria actually capture the circular ele-
ments. Using several predefined environmental criteria in the
procurement process does not necessarily make the outcome of
the procurement more sustainable, green, or circular. Overall,
it has been debated to what extent green or sustainable procure-
ment policies lead to the expected environmental or societal
improvements and effectiveness (Roman 2017; Lundberg et al.
2016; Zhu et al. 2005; Marron 2003).
The literature on sustainable procurement has its origin in
sustainable supply-chain management, which has focused on
recycling, cost reduction, and minimization of waste (Roman
2017; Carter and Dresner 2001; Min and Galle 1997). Corre-
spondingly, specific areas of interest in the literature regarding
CE have been closed loop value and supply chains, circular
business models, and circular product design (Geissdoerfer et al.
2017). Although the production phase, usage phase, and end
97
 R E S E A R C H A N D A N A LY S I S
usage are areas of focus in circular procurement process, the
design phase can also play a key role, which means that pro-
curement can influence design choices early on in the product
creation process so that materials and components are, at the
end-of-life (EoL) stage, suitable for repair, refurbishment, or
reuse (Philips 2016). This addresses the opportunities available
to public procurers to contribute to the selection of compo-
nents and the setting of requirements for materials, as well as
transparency of the supply chain.
According to common understanding, circular public pro-
curement (CPP) refers to procurers’ possibilities for promoting
the general principle of CE, according to which resource input
and waste, emission, and energy leakage are minimized in the
system by slowing, closing, and narrowing material and energy
loops (Geissdoerfer et al. 2017). From the procurer’s viewpoint,
this means promoting the six “Rs,” that is, reuse, recycling, re-
pair, refurbishment, remanufacturing, and retrieving (Van Geet
2014), while stimulating and creating demand for goods that
contribute to the CE (Green Deal 2013). In circular procure-
ment, the procurer should ensure that the products will be
further processed after use, and that they are repairable and can
be separated into subcomponents and/or materials and reused at
the end of their life cycle (MVO Nederland 2015). Higher ex-
pectations involve circular public procurement aiming at zero
waste and no negative side effects of production, leading to
completely compostable or reused products or their elements,
eliminating toxic materials, and using energy from renewable
sources for production (NewForesight 2014). This means that
in the supply chain, waste could increasingly be regarded as
a valuable raw material and thus prevention and recovery of
waste would provide a competitive advantage to bidders.
Several initiatives and pilots have been implemented in the
area of circular public procurement. For example, in Denmark,
the Forum on Sustainable Procurement (Danish EPA 2017) and
Partnership for GPP (Danish EPA 2006) are working to utilize
the country’s public procurements as an enabler of CE. In addi-
tion, pilot cases of circular procurement have been undertaken
in the fields of textiles, computers, office furniture, catering, and
construction (PIANOO 2016; Hillgrén et al. 2015). The gov-
ernments of the UK and the Netherlands have also been active
at EU level in introducing the concept of circular public pro-
curement and launching pilot procurement cases and initiatives
in this field (Van Geet 2014; Circle Economy 2012).
While the term circular public procurement has been used in
general discussion to indicate the possibilities public procure-
ment offers for greening the value chain and capturing value
creation, there is no standard definition or description of the
concept in the literature, nor there is a great deal of evidence
on how public procurement could realize these expectations.
In this paper, we clarify the concept of CPP and position the
concept in relation to GPP/SPP, as well as examining how
well GPP- and SPP-related procurement criteria address cir-
cular aspects. We identify different approaches to how public
procurement can support and promote CE (material circles and
business models) and evidence this through case studies. Based
on these, we provide a discussion of sectors and product groups
98 Journal of Industrial Ecology
in which circular public procurement could be utilized in the
near future and possibly lead to creation of new markets fostered
by public demand.
Analytical Framework
In this chapter, we will identify the main principles and
aspects (i.e., material circles) of CE and related business mod-
els, and based on these, we will formulate a framework for
the analyses. The analyses will be carried out in two phases
(figure 1). First, we examine how SPP and GPP support CE (i.e.,
the above-mentioned material circles and business models) us-
ing criteria analysis of existing SPP and GPP criteria. Second,
we examine how public procurers could implement circular pro-
curement and identify different approaches to CPP. The second
step involves case studies of actual public procurements in order
to find evidence and examples of how circular elements have
been integrated into the procurement process successfully. This
provides us with different approaches to CPP, as well as a dis-
cussion of potential sectors and markets or business models to
which CPP could be applicable.
Framework for Analysis
The analysis framework is based on the “closed-loop model,”
which describes the CE material circles (Ellen MacArthur
Foundation 2012), and related business models provided by the
ReSOLVE framework (Ellen MacArthur Foundation 2015c).
Closed loop approach refers to the principle of controlling ma-
terial inputs to maximize recycling and recovery of materials,
minimize waste to landfill, while greatly reducing the environ-
mental footprint (Ellen MacArthur Foundation 2017). In the
closed loop model, biological and technical materials (and the
products/components based on them) cycle through the eco-
nomic system and value creation stems from keeping products,
components, and materials in use longer within the CE using
the following material circles:
Technical material circles:
1) maintenance;
2) reuse/redistribute;
3) refurbish/remanufacture;
4) recycle.
Biological material circle:
1) regeneration (related to returning recovered biological
resources to the biosphere).
The closer the system gets to direct reuse, that is, the perpet-
uation of its original purpose and value retention, the larger the
cost savings should be in terms of material, labor, energy, capital,
and the associated externalities, such as greenhouse gas (GHG)
emissions, water effluents, and toxic substances. Such shifts pri-
marily require greater durability, reparability, etc. In addition,
separation and return of parts to the cycle should not cause
toxic or harmful impacts (Ellen MacArthur Foundation 2012).
 R E S E A R C H A N D A N A LY S I S

Research objectives
• Identify how public procurement can support and promote CE (material circles and business models)
• Identify how circular elements can be integrated into public procurement processes

Material and methods

Formulating framework for the analysis,

including aspects that support CE according to:
• Circles in closed loop model (Ellen MacArthur, 2015)
• Related circular business models (ReSOLVE model, 2015)

STEP 1
STEP 2
Criteria analysis
Case analysis
(SPP/GPP criteria set by EU, NAPP, Motiva,
(18 public procururement cases)
Hansel)

Results and discussion

• Identification of GPP/SPP criteria that • Different approaches to implementing

support CE circular public procurement (CPP)
• Conceptualization of CPP and its relation • Potential sectors for CPP and possibilities
to SPP and GPP for promoting circular business models

Figure 1 Research plan: identifying how circular elements can be applied to public procurement. CE = circular economy; EU = European
Union; GPP = green public procurement; NAPP = National Agency for Public Procurement; SPP = sustainable public procurement.

In our criteria analysis, we search for SPP/GPP criteria that
support these material circles. Meanwhile, we also pay atten-
tion to how and through which business models these circu-
lar aspects could be achieved in public procurement. In the
tendering process, procurement criteria can also address these
models and requirements concerning them can be stipulated,
such as long-lasting design, maintenance, repair, reuse, reman-
ufacturing, refurbishing, and recycling, etc. (e.g., Geissdoerfer
et al. 2017). In order to establish the link between public pro-
curement and promotion of circular business models, we apply
the ReSOLVE model (Ellen MacArthur Foundation 2015c;
Lewandowski 2016), which identifies six different circular busi-
ness models as follows:
- Regenerate: Public procurers can, for example, require
renewable energy systems or materials.
- Share: Public procurers can, for example, share as-
sets (e.g., in terms of joint procurement and reuse),
or set requirements that ensure a prolonged prod-
uct life through maintenance, repair, and design for
durability.
- Optimize: Public procurers can, for example, set require-
ments that ensure improved efficiency of a product, re-
move waste in production and the supply chain, or buy
automation technology and sensors.
- Loop: Public procurers can, for example, accept reman-
ufactured components, recycle materials, or invest in
anaerobic digestion technologies/systems.
- Virtualize: Public procurers can, for example, set require-
ments or award criteria for virtual elements.
- Exchange: Public procurers can, for example, replace old
materials with advanced, nonrenewable materials, and/or
apply new advanced technologies or services.
The ReSOLVE framework has been chosen because most
different business model types can be fitted into its categoriza-
tion (Lewandowski 2016). The framework is used as a basis for
GPP criteria analysis, but will be modified to better correspond
to the public procurement perspective. The framework will also
be used as a basis for case selection in parallel with the closed
loop model.
Analysis of Public Procurement Criteria
We analyzed existing SPP/GPP criteria in order to examine
to what extent they could promote CE, that is, include ele-
ments that support material circles and circular business models.
SPP/GPP criteria were initially developed to help procurers in-
clude and verify green and social requirements in public tender
documents. The rationale for using them in the criteria analy-
sis in this study was that as well as including criteria for good

Alhola et al., Public procurement promoting circular economy 99

 R E S E A R C H A N D A N A LY S I S
environmental performance, these criteria could also support
the circular elements of procurement.
We chose the EU GPP criteria set for analysis as it is one
of the most extensive sets of procurement criteria intended for
public procurers. It was developed by the European Commis-
sion (EC) and includes GPP criteria for 21 product groups (in
2016). These involve a life cycle approach and are based on
scientific information and data on existing eco-label criteria,
and on information collected from industry stakeholders, civil
society, and EU member states. The core criteria are those suit-
able for use by any contracting authority in any of the member
states and those that address key environmental impacts. The
comprehensive criteria are intended for those who wish to pur-
chase the best environmental products available on the market
(EU GPP criteria 2016).
In addition, we analyzed a number of national GPP cri-
teria, many of which have been developed based on the EU
GPP criteria. These national criteria were examined due to
the fact that they may include some additional criteria as they
have been modified to better correspond to certain markets,
such as the Nordic countries. For example, in Sweden, crite-
ria for public procurement are offered by the National Agency
for Public Procurement (NAPP) for over 50 products groups
at basic, advanced, and spearhead criteria levels. Among the
spearhead criteria are a number of criteria that promote CE
(National Agency for Public Procurement 2017). In Finland,
Motiva–Focal Point for Sustainable and Innovative Public Pro-
curement is constantly working on national GPP criteria, and
at the moment such criteria have been developed for 17 product
groups in cooperation with stakeholders (Motiva 2013).
In addition, municipalities and procuring organizations may
have their own lists of or preferences for sustainable criteria to
be used. For example, Hansel Ltd, the Finnish government’s
central purchasing body, has developed environmental crite-
ria for most of their framework contracts. In 2015, the Finnish
public sector procured over 310 million euros worth of prod-
ucts and services through Hansel’s framework agreements, in-
dicating that it has major potential in terms of contributing to
sustainability targets, with the largest volumes procured being
for electricity, occupational health care services, information
technology and communications (ICT) consulting, computers,
cars, and efficient driving training (Hansel 2015).
Cases of Circular Public Procurement
We used a multiple case-study approach (Yin 2003) to exam-
ine how public procurers could implement and integrate circular
aspects into their procurement processes. Instead of gathering a
statistically representative sample and making generalizations,
the aim was to find different approaches to address circular
elements in public procurement processes. These approaches
were identified and typed according to the extent to which CE
was the fundamental starting point for the procurement, that
is, whether the aim was to follow and improve SPP or GPP
practices, or to conduct procurement that promotes product in-
novation, process innovation, or system innovation (Edler and
100 Journal of Industrial Ecology
Georghiou 2007; Hommen and Rolfstam 2009) in the field of
CE. It has been argued that radical innovations and disruptive
business models are needed if we are to move toward the CE
model (Boons et al. 2013). Thus, examining the procurers’ in-
tentions to innovate, search for circular solutions, experiment
and pilot, as well as adopt new products, processes, and new
organizational setups is of key importance (e.g., Rolfstam et al.
2005).
In the search for circular procurement cases, we started with
those in which circles of CE and aspects of circular business
models had been focused on in the procurement process. This
included cases in which the description or objectives of the pro-
curement supported the aspects of CE (e.g., procurement of re-
cycled products or materials). In addition, the supplier may have
been asked for a new solution, or the description of the subject
matter may have been left “open” to innovative solutions that
stimulated CE and related business. Alternatively, a description
of circular processes may have been requested/required in the
tendering phase; this means that the supplier would have had
to describe how the materials were to be circulated, what the
end product would be, and what its markets would be, etc.
In addition, we mapped procurement cases in which certain
tools had been used in the procurement process to address cir-
cular elements, including life cycle costing as an indication of
cost savings in resource use, eco-label criteria or GPP criteria
that support recycling, reuse, recyclability, nontoxicity, etc., or
in which attention had been paid to eco-design. We also looked
for, wherever possible, the environmental and economic bene-
fit of circular elements and the impact of the procurement on
CE, if it had been recognized and reported.
The cases were sought out from among ongoing public pro-
curement research projects and initiatives that aim to promote
sustainability and innovation. One of these initiatives was un-
dertaken by Tekes (Finnish Funding Agency for Innovation),
an agency to which public procurement units can apply for fund-
ing to prepare innovative public procurements (Tekes 2015).
In addition, we looked for cases through national bodies that
provide advice and consultancy to public procurers about sus-
tainable procurement, for example, Motiva in Finland (Motiva
2015).
Several public organizations, such as associations of local
and regional authorities, regional hospital districts, transport
agencies, and other governmental authorities, also provided
good procurement examples. In addition, other nationally
well-known best practices from cities and municipalities
were identified. Networks of “sustainable cities” provided
innovative examples and initiatives concerning potential
circular procurement cases. One example of such a network
is the HINKU (Carbon Neutral Municipalities) network,
which is a cooperative forum of municipalities, businesses,
residents, and experts in Finland. Data were compiled from
the organizations’ websites, reports, preliminary documents,
and tendering documents and, in some cases, supplemented by
interviewing personnel from the procuring unit.
Although in the mapping of cases we focused on Finland,
Denmark, and Sweden, we also sought out examples from

other EU countries, using the PPI (Public Procurement for
Innovation) Platform maintained by ICLEI (www.innovation-
procurement.org/) and examples of GPP collected by the EC
(http://ec.europa.eu/environment/gpp/case_group_en.htm).
Altogether, 18 circular procurement cases were selected
(table 1; additional information about the selected cases is
available in table S1 in the supporting information available
on the Journal’s website).
Results
Procurement Criteria Supporting Circular Economy
Public procurement criteria that are formulated for good sus-
tainable and environmental performance (i.e., SPP/GPP crite-
ria) can support the circular aspects, that is, material circles in
the closed loop model (Ellen MacArthur Foundation 2012). In
particular, product groups such as cleaning products and ser-
vices, textiles, vehicles, food and catering, furniture, copying
paper, and ICT devices and other electronic devices include
criteria that also promote the circles, that is, maintenance,
reuse, redistribution, refurbishment, and recycling (See table S2
in the supporting information on the Web, which presents ex-
amples of these criteria based on a criteria analysis of the EU
GPP, NAPP [Sweden], Motiva [Finland], and Hansel [Finland]
criteria.)
In particular, these criteria support the share, optimize, loop,
and regenerate business models, whereas the virtualize and ex-
change business models, for example, were not supported by the
predefined GPP or SPP criteria (see table S2 in the supporting
information on the web). Criteria concerning the share business
model focused mainly on prolonging the product life span, while
criteria supporting the optimize business model focused mainly
on efficient and correct use of the product. In addition, recycling
and possibilities offered by recycled materials were the focus of
the loop business model, while from the procurers’ viewpoint,
important aspects included nonrisky cycles and possibilities for
regenerating biological materials. On the basis of these findings
and conclusions, we modified the ReSOLVE business model
(BM) framework to better illustrate those business models that
the predefined SPP/GPP criteria could support, and formed the
following categories:
1) Extend the product life span (incl. in the share BM)
2) Use the product or service more efficiently (incl. in the
share and optimize BMs)
3) Improve the cycling of biological or technical materials
(incl. in the loop BM)
4) Provide clean and nonrisky cycles (incl. in the loop and
regenerate BMs)
Several GPP criteria support the extension of product life
spans. These include requirements regarding the use of reusable
packaging or parts, especially in devices, cleaning textiles and
clothes, and cutlery. In addition, GPP criteria typically seek
to include repair, regular servicing, and the right to exchange
Alhola et al., Public procurement promoting circular economy
R E S E A R C H A N D A N A LY S I S
parts/products in the terms of the guarantee. Some criteria also
suggest that spare parts must be available for 5 years after the
guarantee period. Other criteria advise that education on cor-
rect usage, availability of a user manual, and peripherals (e.g.,
engine heater) should be required. In particular, in the fur-
niture product group, durability, ease of assembly/disassembly,
and recyclability are stressed. For certain product groups, such
as vehicles, tires, and ICT devices, it is suggested that retreated
or refurbished parts are accepted.
Criteria promoting efficiency of use are also presented in ex-
isting procurement criteria sets. Leasing and hiring concepts are
recommended, especially in product groups such as transporta-
tion services, vehicles, furniture, computers, and other ICT
devices. Some criteria suggest that the procurer ask how the
supplier promotes the reuse of devices (e.g., for ICT). In addi-
tion, a requirement that guidance will be given on the efficient
usage and disposal of products is suggested for many product
groups.
Most of the criteria supporting circular aspects focus on fa-
cilitating recyclability or the recycled content of products or
packaging. Criteria concerning the proportion of recycled ma-
terial in the packaging or product (e.g., comprising 80% recycled
materials for paper products) or products that should be fully
or partly made of recycled material (e.g., furniture) are com-
monly presented among the procurement criteria. In addition,
for the construction and maintenance of buildings, competence
in design, specification, and site management are focused on
in order to minimize construction and demolition waste and
to use building products or materials with a high recycled or
reused content. However, no explicit criteria concerning the
European waste hierarchy, that is, favoring material recycling
over energy recovery, were stated.
Nonrisky cycles receive a degree of attention among the
criteria, including the avoidance or limitations on the use of
certain chemicals, for example, phosphorus and biocides in
cleaning detergents, solvents in furniture, and totally chlorine
free chemicals in paper production processes. Procurers may
also request information on how the supplier has organized the
recovery of harmful chemicals. This request is, for example,
suggested for car servicing and vehicles. In order to guarantee
appropriate recycling, a requirement stating that the final lo-
cation of waste must not be located outside the EU could be
stipulated, for example, for computers and other ICT devices.
Approaches to Circular Procurement
In the case analysis phase, we identified four main approaches
in how public entities can implement circular procurement that
facilitates closed loop material circles. These approaches in-
clude the procurement of better-quality products, use of new
business and procurement concepts, procurement of innova-
tive and new “circular” products and systems, and developing
circular ecosystems. In figure 2, the cases analyzed are catego-
rized according to how well they illustrate these approaches.
Although one approach may dominate, each case can also in-
clude elements of other approaches.
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Table 1 Cases included in the study

Case# Procuring organization Procurement activity

Construction of buildings and infrastructure

1 Copenhagen Municipality,
Denmark, 2011–2013
2 City of Lahti and Tarpaper
Recycling, Finland, 2015
3 Helsinki, Finland, 2014
4 Berlin, Germany, 2011
5 Finnish Transport Agency, 2014
Use of old bricks in two building projects extending and renovating
old schools.
Precommercial pilot platform for testing recycled asphalt and using
roofing felt waste in road construction.
Recycled materials used in the construction of Ida Aalberg Park,
Helsinki, including soil extracted from other construction sites.
Concrete with recycled aggregate instead of gravel used in building
construction.
Use of recycled soil and ash in a pilot road construction project.

6 City of Hamburg, Germany, 2011
7 London, UK, 2012
Water management and sewage systems
Recycled asphalt used to resurface the same road from which it was
originally taken.
Procurement of materials for the Olympic Park focused on
responsible sourcing and use of secondary materials.

8 Porvoo, Finland, 2014
9 Helsinki region, Finland, 2016
onwards
Vehicles and logistics
Improved recycling and reuse of nutrients (i.e., phosphorus and
nitrogen) in the treatment of sewage sludge and biowaste.
Four to five pilots of new technologies for treating and utilizing
digested sewage sludge and other biomass.

10 Kalmar Länstrafik, Sweden, 2017 Criteria for public transportation that replaced fossil fuels with
different types of biofuels.
11 City of Vaasa, Finland, 2014 Biogas buses powered by locally produced biogas based on a new
business ecosystem and delivery network.
Waste management

12 VA SYD, Sweden, 2017 Waste collection focused on “upstream work” to reduce

environmental pollutants and waste at source.
13 Eastern Uusimaa, Porvoo, Finland, Replacement of a mixed waste bin with a waste bin with four lockers,
2013 one each for mixed waste, cardboard, paper, and glass and metal
together.
Food and catering

14 Pyhäjärvi, Finland, 2014 New product using roach for fish steaks that was targeted at food
services for both private and public consumers.
15 Sodankylä Municipality, Finland, Technological applications improving delivery logistics and food
2012 onwards processing.
Furniture

16 City of Helsinki, Finland, 2013 Rental rather than purchase of nursing beds designed that was easy to
transport, fitted through small doorways and into lifts, and opened up
into a normal use position in a few minutes, using its own motor.
17 Danish SKI, and Duba-B8, 2013 Contract language specifying that office furniture must be able to be
disassembled into parts and have the potential to be reused several
times.
Textiles

18 Herning Municipality, Denmark, Detailed guidance on the criteria for the reuse, repair, and disposal of
2013–2015 working clothes.

102 Journal of Industrial Ecology

 R E S E A R C H A N D A N A LY S I S

2. Using new business 3. Procurement of new circular

concepts promong circular products
economy
New products or
New and innovave approaches Case 9 technologies are procured
are used to respond to the (and developed) on the
procuring unit’s need, market as a result of public
promong efficient material Case 18 procurement processes
cycles

Case 6
Case 16 Case 4
Case 10

Case 12
Case 17 Case 1
Case 13 Case 2 Case 5
Case 14
Case 15

Case 8
Case 11

Case 7 Case 3

1. Procurement of 4. Development
improved products of circular
or services in ecosystems
circular terms
Investments that smulate
Improved products and services that include ’circular’ ecosystems are fostered
circular aspects are procured by adding more by public procurement
GPP/circular criteria to the tender compeon

Figure 2 Illustration of four approaches to circular procurement. GPP = green public procurement.

procurer requested that potential suppliers provide a description

1. Procurement of improved products and services by adding
GPP-based “circular criteria”
Circular public procurement can be promoted by adding
“circular criteria” to the tender competition, that is, criteria for
recyclability, reuse of materials, use of recycled materials, etc.
This approach leads to procured products and services of better
quality in circular terms, such as paper made from 100% recycled
material. Nevertheless, the subject matter of the contract does
not necessarily require new product development. These crite-
ria that support circular aspects can be found in the EU GPP
criteria sets (see table S2 in the supporting information on the
Web).
Several case studies support this approach. For example, in
the procurement of sustainable concrete [case 7], the supplier
had to ensure that as a minimum, construction materials by
value were comprised of at least 20% recycled content and
that 25% of the aggregate used was recycled. Furthermore, in
Helsinki [case 3], the use of soil extracted from other sites was
required. In the service procurement of biowaste and sewage
sludge treatment [case 8], the cycling of nutrients was in-
cluded in the definition and objectives of the procurement. The
of how the aspects concerning energy efficiency and the cycling
of nitrogen and phosphorus would be dealt with and optimized
during the service. Possible locations for the end product were
also requested. As a result of the negotiations, several technical
criteria were stipulated in the final call for tender, stating that
a minimum of 80% of the nitrogen delivered to the treatment
plant must be directed for use as a fertilizer product or industry
chemical and only 20% could be directed to the local waste
water treatment plant.
The procurement of food and catering in Sodankylä [case 15]
highlights continuous efforts to make the provision of catering
functions more sustainable. Instead of high volumes, attention
was paid to how products and raw materials enter stock, and
how they would be handled, processed, packed, and delivered.
The sizes of the lots ordered were also carefully considered in
the procurement phase. In addition, seasonal food opportuni-
ties, local production and cooperation, logistics, experiments,
product development, and innovative recipes were included in
the overall planning of circular food procurement. In this case,
public procurement was used also as a strategic tool to make
catering and kitchen operations more sustainable and circular.

Alhola et al., Public procurement promoting circular economy 103

 R E S E A R C H A N D A N A LY S I S
2. Procurement of services and use of new business concepts
The focus of a procurement could be on the process or
business concept instead of the product itself. Such instances
include product-service systems, leasing concepts, shared use,
buy-per-use, and buying and selling back. Traditional examples
include furniture leasing and car hiring. A leasing service could
be used as a means to use products more efficiently and avoid
storing old products, such as furniture [case 16]. Based on the
criteria analysis, leasing could be well applicable to vehicles,
too. Innovative thinking may be needed in purchasing new
services for functions that have traditionally been procured as
products (e.g., lighting for the next 30 years instead of lamps).
However, with leasing arrangements, the bulk of the responsi-
bility for proper end use, cycling of materials, and closing the
loop is placed on the supplier.
New concept developments can be found in waste man-
agement [cases 12, 13], for example. Significant improvements
in the recycling rate can be achieved with the requirements
imposed by a different waste collection system [case 13]. In
Sweden, a new waste management approach encompassed a
separation of activities from collection and transportation to
reuse and recycling [case 12]. Dividing waste management con-
tracts into smaller, separate contracts increased the number of
potential suppliers who offered their services, specifically small
to medium enterprises as entrepreneurs on-site, which in the
long term will stimulate local and regional business activities,
lower prices, and make site-specific adaptions possible, to the
benefit of the environment.
3. Procurement of new and innovative products, services,
and materials promoting circular economy
In accordance with the principles of CE, public procure-
ment could provide conditions that stimulate the development
of new products and innovative solutions, as well as creating
new business and markets for such products, that is, products
that are of considerably better quality in terms of recyclability,
recycled materials, disassembly, long life span, and so on. This
approach addresses products that have been commercialized,
but have not yet been on the market for a long time, or prod-
ucts that would be developed as a result of the procurement
process. In addition, the procurer’s ability to conduct a process
of innovative procurement, precommercial procurement, or a
research and developement (R&D) project may play a key role.
The study indicated that there are opportunities to new
circular business openings and innovation through public pro-
curement in several sectors, for example, infrastructure [cases 4,
5, 6] and building construction [case 1], waste [case 2] and waste
water management [case 9], as well as in product groups such
as furniture [cases 16, 17] and textiles [case 18]. More in-depth
analysis of these cases is presented in table S3 in the supporting
information on the Web.
Cities and municipalities may offer a platform for innovative
pilots and experiments [case 2], and successful pilots can pro-
vide references and market demand for new circular solutions.
104 Journal of Industrial Ecology
Public procurement may also include R&D activities that pro-
mote CE [cases 9, 18]. In addition, public procurers may set
ambitious CE needs and targets to which the market has
to develop new solutions [cases 1, 16, 17] or stipulate con-
tract terms that steer toward more efficient use of resources
[case 5]. High-level targets and criteria give suppliers a signal
that can be translated into innovations. However, setting am-
bitious CE targets requires understanding about the potential of
market and technology development. If possibilities for innova-
tion and technology development exist, it may be useful to set
CE requirements as mandatory criteria [cases 1, 17]. Otherwise,
it could be wise to propose these as award criteria as the supply
of innovative products may be limited.
4) Procurement promoting industrial symbiosis and circular
ecosystems
This approach addresses large investments and the creation
of ecosystems that call for cooperation and commitment from
different stakeholders. Circular ecosystems can be efficient plat-
forms for supporting closed loops and creating networks in
which the waste from one actor can be used as a raw mate-
rial for another. Examples include buses running on locally
produced bioenergy, or construction sites that utilize materials
effectively.
A Swedish call for tender for public transportation [case 10]
included a list of different types of alternative sources, such as
ethanol, biodiesel, vegetable oil, biogas from municipal waste or
liquid and solid manure, as well as “green electricity” from wind,
water, biomass, or solar sources. This was intended to simulate
higher generation and production of these fuels and electricity
from local or regional activities and manufacturing. Another
example is the procurement of buses that use locally produced
biogas, implemented as part of the public transportation pro-
vision in the City of Vaasa [case 11]. The City organized two
separate tender competitions: (1) for the service provider and
(2) for the biogas vehicles, including maintenance. The City
committed itself to buying 12 biogas buses and to providing
them for use by the service provider for the next 5 years. In ad-
dition, the City signed a contract with a local biogas producer,
who, in turn, organized a call for tender for a biogas delivery
network. As an outcome, a new business ecosystem was devel-
oped that included the more efficient utilization of waste and
biogas production from local waste. There was also an intention
to later expand the biogas network to the private market.
Discussion and Conclusions
Linkages of Circular Public Procurement to Sustainable
Public Procurement/Green Public Procurement
Sustainable and green public procurement both have litera-
ture streams that are closely linked to CE, for example, greening
the value chain and providing opportunities for environmen-
tally preferable products and business models (Roman 2017;
Walker and Phillips 2009; Chiarini et al. 2017; Testa et al.

2016; Walker and Brammer 2009; Carter and Dresner 2001;
Min and Galle 1997). In addition, the EC has set out several
key actions regarding GPP, such as including requirements for
durability and reparability in the EU GPP criteria, and provid-
ing training on CE, as supportive tools for the Circular Economy
Package (European Commission 2015). Our study also revealed
that the existing life cycle–based SPP/GPP criteria already con-
tain requirements for promoting the circulation of materials,
including recyclability, nontoxic cycles, recycled content, and
recycling in production and at EoL, that could be used as a
basis to indicate expected circular aspects of the procurement.
However, it seems that only a few of these criteria focus di-
rectly on the concept of a circular life cycle approach instead
of a linear one. Good examples were found in the ICT sector,
construction, vehicles, and transportation, in which the use of
these criteria could promote CE, and the business models: share,
optimize, loop, and regenerate (Ellen MacArthur Foundation
2015), in particular. In addition, they respond to the product
trends of CE, including the changing product life span, markets
for recycling, building services around products, and increasing
use of modular design (De Schoenmakere and Gillabel 2017).
While SPP and GPP are product- or technology-oriented
and focus on the tendering process (Uttam and Roos 2015;
Walker and Phillips 2009), we suggest that circular public pro-
curement could go beyond this and pay attention to the com-
plex network of supply chains and other stakeholders (Bocken
et al. 2016). In CPP, the main object of the negotiations be-
tween supplier and procurer switches from product orientation
to product-service system (Mont 2002) and from price per prod-
uct unit to price per delivered service (Witjes and Lozano 2016).
Thus, we suggest that CPP could be defined as: a procurement
of competitively priced products, services, or systems that lead to ex-
tended life spans, value retention, and/or remarkably improved and
nonrisky cycling of biological or technical materials, making use of
and supporting the circular business models and related networks.
Based on this definition, CPP could also be a part of a system
that helps to reach circularity instead of closing the material
loop itself.
Many governmental and local initiatives that promote SPP
are, in fact, at the same time promoting CPP, although not
necessarily explicitly using the term circular procurement. To-
gether, SPP/GPP and CPP can be regarded as an important
element of sustainable development, with the overall objective
of leading to environmental improvements, value creation, and
social well-being. Elements of circular procurement should not,
however, compromise the overall goal of sustainable procure-
ment. As an example, recyclability aims should not be regarded
as more important than other sustainability aspects, such as
GHG emission targets, or make the life cycle–based price of the
procurement noncompetitive. Similarly, the procurer should be
aware of clean and energy efficient technologies and improve-
ments that could provide major energy and resource efficiency
in comparison to continued use of old, less efficient products
that cannot be upgraded. For example, leasing could be used in
cases where the public entity is willing to switch to clean tech-
nology solutions, for example, light-emitting diode lighting or
Alhola et al., Public procurement promoting circular economy
R E S E A R C H A N D A N A LY S I S
electric cars without a need to make the initial technology in-
vestment (Alhola et al. 2016). CPP could also expand the scope
of innovative solutions and create new products, technologies,
and businesses in the field of clean technology. However, we
recognize the tendency of public procurement to provide a basis
for the diffusion of existing circular aspects of certain products
more often than promoting a truly new technology develop-
ment or innovation based on circular solutions. Thus, public
procurement currently supports and promotes a variety of dif-
ferent elements of CE rather than building up solutions from a
circular basis.
Circular Public Procurement in Practice
This study illustrated four approaches to how public procur-
ers could implement circular procurement or integrate circular
elements into procurement processes. The focus can be on the
product or service being improved, a new product being de-
veloped in circular terms, a procurement process based on a
product-service system or another circular business model, or
circular ecosystems, in which many stakeholders cooperate, lo-
cally provided resources are circulated, and regional networks
are developed. Although these approaches can be overlapping
in the sense that they may include some of the same features,
procurement of new circular products and development of cir-
cular ecosystems seem to support the idea of innovative public
procurement (Edler and Georghiou 2007) and public procure-
ment of innovation (Edquist et al. 2015), whereas procurement
of improved products and services can be carried out by adding
existing GPP criteria to tendering processes.
Based on the case analysis, we identified several sectors, such
as construction and renovation of buildings and road infrastruc-
ture, water and wastewater treatment, and public services such
as public transportation and waste management, in which there
are opportunities to promote CE and new business openings
through public procurement and investments. More in-depth
discussion about the specific sector opportunities is provided in
table S4 in the supporting information on the Web. There are
also product groups in which CPP can be considered a standard
procedure, such as paper, ICT, and metal products, for which
there are well-developed markets and support systems for recy-
cling and/or reuse. Alongside these product groups, there are
also some business concepts that have traditionally been based
on the key elements of CE. Leasing and renting services related
to office equipment, ICT devices, or textiles like workwear, car-
pets, and hotel textiles can bring more intensity to the use of
products while at the same time being profitable business. In
these product groups and business concepts, circular elements
in procurement are more mature, whereas some product groups
and symbioses requiring new business models and extensive co-
operation are only slowly emerging.
There is evidence that a public procurer could act as a
promoter in transforming a system from a relatively simple
model to a highly complex, multitechnology solution (Gee
and Uyarra 2013). In addition, public procurement can pro-
mote private sector innovations (Uyarra et al. 2014; Edler and
105
 R E S E A R C H A N D A N A LY S I S
Georghiou 2007) or contribute to the creation of new markets
(Mazzucato 2015). Public procurement has served to promote
local bioenergy networks and markets, for example (Aldenius
and Khan 2017). Also, our study indicated that public trans-
portation may accelerate the local biogas production and mar-
ket. In addition, some business sectors, such as furniture, could
benefit from the development of new, life cycle–based service
concepts and related market for “products after procurer’s use.”
Overall, it could be argued that CPP is well applicable to sec-
tors in which CE is already being promoted. This may include
eco-design activities, supportive legislative frameworks, circu-
lar supportive urban planning, and the development of related
business activities. For example, if an efficient service provider
network or after-markets exist, CPP can be more attractive.
Despite the fact that the potential public procurement has
for stimulating the CE can be seen, there are still great chal-
lenges ahead. Reasons for the slow implementation of circu-
lar procurement patterns and innovative procurement diffusion
on a broader scale could be the lack of experience and in-
formation among public procurement authorities, a dominant
emphasis on price rather than quality, a lack of interaction
with markets, and a lack of competence among procuring or-
ganizations (Georghiou et al. 2013; Uyarra et al. 2014). Our
study supports the view of previous studies that procurement
professionals should focus more on collaboration and dialogue
with all members of the network in order to be able to cre-
ate value propositions for the end users, eventually resulting in
real customer value (Vargo and Lusch 2004), and that procuring
units need to improve and adopt novel skills, internal coordina-
tion and management practices, and link different stakeholders
to the procurement process (e.g., Testa et al. 2016; Valovirta
2015; Edler and Uyarra 2013; Edler and Yeow 2016; Edquist
et al. 2015; Uyarra et al. 2014; Rolfstam et al. 2011). These
are, in fact, among the success factors in private sector pro-
curement, where the best actors gain a competitive edge with
well-managed procurements (Väänänen 2017).
The managerial contribution of our research can be found in
the strategic use of public procurement to promote and develop
sustainable and circular cities. This study provides a frame-
work for using public procurement as a means to implement
resource-efficiency strategies and objectives in practice. Includ-
ing a circular approach systematically in procurement processes
calls for strategic management of the procurement and involves
public authorities continuously searching for new solutions and
innovations on the market and supporting circular opportu-
nities in all their procurements. Public procurers could start
CPP activities with defining sustainability and circular targets
in their procurement strategy and policies and building up man-
agement capabilities and procurement skills in SPP/GPP and
CPP. They could utilize research data, for example, life cy-
cle assessment–based information when identifying significant
environmental and circular aspects and goals in their procure-
ment. Respectively, they could suggest topics for training and
further research, as new and innovative practices are also form-
ing in research and development activities, not only in market-
based conditions. Public procurers could also start to routinely
106 Journal of Industrial Ecology
request environmental information throughout the value chain
as part of contractual clauses, or secure sufficient resources to
carry out follow-up activities and continuous improvements
with their contractors. Finally, early stakeholder engagement,
market dialogue, and risk management are essential in conduct-
ing innovative CPP. Simultaneously, recyclable products and
materials must also be developed and available on the market
on a much broader scale.
Acknowledgments
We would like to thank the Nordic Council of Ministers
(NCM) Working Group on Sustainable Consumption and Pro-
duction (SCP) for its administrative assistance. We are also
grateful to the project steering group, which included members
from Denmark, Finland, Sweden, Norway and Iceland. In ad-
dition, we extend our thanks to the many experts and industry
representatives who have shared their views with us during our
research project.
Funding Information
We would like to thank the Nordic Council of Ministers
(NCM) for financing this research.
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Supporting Information
Supporting information is linked to this article on the JIE website:
Supporting Information S1: This supporting information provides four tables that report circular procurement cases
(table S1); procurement criteria that support CE in the EU GPP toolkit, NAPP guidance (Sweden), Motiva guidance
(Finland), and Hansel’s state procurement framework contracts (Finland) (table S2); in-depth case studies of procurement
of new and innovative products, services, and materials promoting CE (table S3); sector opportunities for CPP (table S4).

Alhola et al., Public procurement promoting circular economy 109