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Circular procurement refers to the acquisition of products and services that follow circular economy principles, aiming to extend product life cycles and minimize waste through design, reuse, and recycling.
Circular procurement may involve acquiring goods and services designed to extend product life cycles, including shared-use models, the refurbishment or reuse of existing assets, and products containing recycled materials.[1]
According to the United Nations Environment Programme (UNEP), circular procurement refers to the practice of purchasing products or services that adhere to the principles of the circular economy. This approach 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 seeks to promote sustainability by ensuring that resources are efficiently utilized and that waste is minimized.[2]
Circular public procurement can contribute to the Sustainable Development Goals (SDGs) outlined by the United Nations in the 2030 Agenda for Sustainable Development.[6] In particular, SDG 12, Responsible Consumption and Production, includes a target to promote sustainable public procurement practices in line with national policies and priorities.[7] 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.[7]
The European UnionCircular Economy Action Plan is a policy framework designed to address the environmental and resource impacts associated with the entire life cycle of products.[8]
Circular procurement can be implemented at several levels:[9]
System Level: Involves contractual approaches that facilitate circularity, 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.[10][11] 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.[12] Additionally, a study conducted in China suggests that circular procurement can reduce costs and improve overall financial performance.[13]
According to a Research & Metric article published in November 2025,[14] the circular economy market has grown by an average of 43% annually since 2020, with projections indicating continued exponential growth through 2030. 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. 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]
(PDF) The European Climate Law, REGULATION (EU) 2021/1119 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 30 June 2021.
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