1. Define ‘circular economy’

There is no single definition of the ‘circular economy’ – the term circularity can be interpreted in many different ways.

As an example, when is that table you want to purchase considered to be circular? When it’s made from recycled materials, when it’s already had a life or when it can be reused, even in the future? And is one table more or less circular than another?

It’s especially important that you define what you mean by these terms before your organisation starts working with them. This prevents ambiguity in the procurement process and makes your results easier to measure.

1.1 Circular economy versus circularity

Circular economy and circularity are often used interchangeably, but there is a difference:

  • Circular economy: is about the economic system as a whole. Within it, you give products, components and materials a new purpose, products are non-toxic and are made with renewable energy. As a result, products, components and materials retain their value in closed cycles.
    In some definitions, ‘circular economy’ also deals with social aspects, such as employment.
  • Circularity: is primarily a technical challenge and is about how products, components and materials are (or can be) used and reused in a way that is of technically high quality. However, the term circularity itself does not tell you how to organise circularity. The term circular economy does give some meaning, however.

The following is an example of a definition of circular economy that you could use as a point of departure:

A circular economy is an economic system that is based on minimising the use of resources by reusing products, components and high-value raw materials. It is a system of closed cycles in which products lose their value as little as possible, renewable energy sources are used and systems thinking is central.

Source: Ellen MacArthur Foundation (2012), Towards the Circular Economy Vol. 1: an economic and business rationale for an accelerated transition

1.2 A closed cycle

When creating a circular definition, it’s important to bear in mind that the circular economy is not just about extending the lifecycle of products and components and that closing the cycle of raw materials and materials is also essential. In your circular definition, you should also include how you deal with the ‘end-of-life’ phase so that you can close the cycle. We distinguish between two types of cycle:

  • Biological (green) cycle: comprises materials that are biodegradable and thus provide a raw material for other natural processes. Examples are food or wood.
  • Technical (blue) cycle: comprises products that are not biodegradable and must ‘circulate’ for as long as possible. Examples include fossil fuels, plastics and metals.
Source: Ellen MacArthur Foundation (2012)

1.3 Define at organisation level

Start by determining what the ‘circular economy’ means for your organisation when starting a circular procurement process. Before starting a circular procurement process, it is important to know why you want this for your organisation. At a minimum, you should formulate a definition of the concept, or specify that ‘a circular economy is …’.

Do this for specific product groups as well, such as: ‘Circular clothing is …’. For the latter, you start by creating a working definition. Seek input from internal stakeholders and ultimately establish the definition with your suppliers as part of a market consultation.

Follow both national and local policies in your definition. Consider objectives that promote bio-based product procurement or that help to create local employment.

1.4 Define at project level

In addition to a definition for your organisation, formulate a clear definition for each procurement process. This answers the question of what exactly ‘circular’ means for this process. That way, you bring clarity to market parties who may bid on your call for tenders. This also excludes discussion about the circularity of that call for tenders.

Examples of definitions at project level:

  • Office furniture: when procuring office furniture, the circular ambition can focus, for example, on extending the service life of existing furniture – if it is still in good condition. Does the old furniture really need to be replaced? In that case, ‘circular’ could focus on purchasing furniture with healthy and recyclable materials (in line with cradle-to-cradle), or on maximum reusability in the future.
  • Construction project: there are also several options in a construction project. For example, in new-build projects, ‘circular’ has a different meaning than it does in renovation or modernisation. For new-builds, for example, consider a building in which as many recycled materials as possible are used or in which all parts can be disassembled and reused. In renovation or modernisation projects, the emphasis is often on preserving the value of materials and elements that are already there.

You should also consider the vision document from Rijkswaterstaat in which it elaborates its definition for circular furniture:

Points for action

  • Determine a clear definition for circular economy as a starting point for your organisation.
  • Link your definition at organisation level to the local context and internal priorities.
  • For a procurement process, determine a definition that is consistent with the context of that project.

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