Rethinking Circular Procurement – Reflections from the EU’s Policy Journey for Taiwan’s Circular Transition

Author: Lina Svensberg

As I prepared my keynote for the conference, I started to put together some notes that grew into this article, which includes a bit more detail than I had room for in the session.

Circular procurement may sound like a technical niche, but in fact it is a fascinating field, both from a policy perspective and from a practical one. From a policy perspective, it connects industrial policy, innovation policy, and sustainability goals, among other areas. From a practical perspective it illustrates the core of my argument about integrating procurement activities into innovation processes.

When I wrote What the Devil Wears Prada can teach us about Transformative Innovation Policy earlier this year, I reflected on how difficult it can be to get an overview of innovation policy when you first encounter it from the ground level – how ideas travel through a whole chain of frameworks, programmes and instruments before they reach practice. This overview of circular procurement policy is, in a way, a continuation of that thought. Even if simplified, this overview is my attempt to show how policy ideas, from different policy areas evolve over time and are woven together into the fabric of different strategies and instruments, the fabric that shapes how we work with innovation and sustainability today.

In Europe we have spent over two decades developing policies that try to use public demand as a lever for green transformation. The journey has been anything but linear -more like a train ride across Sweden, complete with missed connections and replacement buses, but also some express lines.

In this article, I want to share that journey — how the EU’s policy landscape on circular procurement has evolved, how local pioneers have translated it into practice, and the lessons we can learn. I also want to reflect on what I believe is missing from today’s debate: recognising procurement as an innovation policy instrument in a broader sense than the current focus on PPI (Public Procurement of Innovation) and PCP (Pre-Commercial Procurement). There is an important distinction between integrating innovation activities into a procurement process and embedding procurement activities into an innovation process — a difference that becomes even more relevant in the context of circularity, which I’ll return to later in the article.

The policy journey of circular procurement in the EU – and a couple of local stops

Here is a brief overview of Europe’s policy journey on circular procurement. For anyone not working with policy every day, the international debate is full of acronyms and terminology that can be hard to follow. My aim here is to explain, in simple terms, not only what the different concepts and instruments mean, but also how they connect to each other, and how the underlying ideas have developed over time – here seen through the lens of circular procurement.

This overview is based on my own reading and interpretation of EU policy documents and related materials, and I’ll add the sources at the end of the text. It’s a complicated field with many interconnected documents, and if anyone has a different interpretation or notices something I’ve missed, I’d be happy to receive feedback.

2008–2013 – Early Green Public Procurement (GPP). Preparations for this journey started with OECD encouraging green public procurement (GPP) already in 2002, but I take 2008 as a real starting point — when the EU pulled earlier national efforts together, consolidated GPP criteria across Member States, and set out a structured policy framework to make sustainable purchasing easier and more coherent. Uptake, however, was patchy, with strong pilots in some member states but little systemic impact overall.

2014 – New procurement directives. The 2014 Directives reinforced the “Most Economically Advantageous Tender” (MEAT) approach, making it the main basis for awarding contracts and clarifying that factors such as lifecycle costs, quality, and sustainability could be taken into account. In theory, this flexibility could drive sustainability and innovation. In practice, much of it has remained underused.

2015–2020 – First Circular Economy Action Plan (CEAP I). The Commission launched the first Circular Economy Action Plan in December 2015, and it was implemented through to 2020. It focused mainly on waste reduction and resource efficiency. Circular procurement was mentioned briefly, under sustainable consumption, as a way to encourage circular requirements in purchasing.

2019-2022 – The Green Deal and CEAP II. In December 2019, the EU launched the European Green Deal, its overarching strategy for reaching climate neutrality by 2050. The idea was to turn environmental and climate challenges into drivers of sustainable and inclusive growth. Building on this, the Second Circular Economy Action Plan (CEAP II) came in March 2020. It widened the circular agenda by focusing on systemic change across whole product lifecycles, sector strategies in areas like electronics, textiles and construction, and the expansion of the Ecodesign framework into a Sustainable Products Initiative, later developed into the Ecodesign for Sustainable Products Regulation (ESPR). It also introduced the concept of a Digital Product Passport (DPP) to track circularity along value chains. Procurement now started to be seen as a tool for driving market-wide change, moving beyond recycling targets to shaping demand and innovation.

2022 – The New European Innovation Agenda – NEIA. The EU’s innovation strategy to boost deep tech and startup scaling. Innovation procurement is seen as an innovation policy tool to stimulate experimentation, support startups and scaleups, and strengthen Europe’s technological sovereignty in green and digital fields.

2023-2024 Sectorial legislation The EU now shifted from ambition to binding rules. Four stand out: the Batteries Regulation (2023), the Ecodesign for Sustainable Products Regulation – ESPR (2024), the upcoming Right to Repair Directive and Net-Zero Industry Act (NZIA, proposed 2023, adopted 2024). They set clear requirements for durability, repairability, recycled content, and transparency across value chains—moving well beyond earlier policies.

· Batteries Regulation (2023): Rules on durability, recycled content, easy removal and replacement, plus a digital battery passport. Also high targets for collection and recycling.

· Ecodesign for Sustainable Products Regulation – ESPR (2024): Covers almost all goods, with requirements on durability, repairability, resource use and recycled content. Expands the Digital Product Passport to more product groups.

· Right to Repair Directive (provisional 2024, expected 2025): Ensures repair services, spare parts and information must be accessible, supported by a European repair platform.

· Net-Zero Industry Act (2024): Strengthens Europe’s capacity to produce clean technologies and introduces demand-side measures, including public procurement, positioning procurement as a tool for scaling industrial innovation and resilience.

Together, these laws make circularity enforceable in procurement – no longer a guideline, but a requirement.

2024–2025 – Competitiveness and resilience

EU industrial policy shifted again in this period. The Draghi Report (September 2024), commissioned by the European Commission, warned of Europe’s dependence on imports, fragmented supply chains and the risk of falling behind in clean-tech and deep-tech. It highlighted the need for procurement to be used more strategically, for example by aggregating demand, fostering a ‘buy European’ preference, and coordinating public purchasing to strengthen key sectors and scale up innovation.

– The Competitiveness Compass (January 2025) is the EU’s new industrial strategy framework setting priorities for innovation, decarbonisation, energy transition, and strategic autonomy. It proposes reforms to public procurement rules, including introducing a ‘European preference’ for public contracts in key sectors, so procurement can become a strategic lever for technological and market leadership.

– The Clean Industrial Deal (February 2025) mobilises over €100 billion, including the creation of an Industrial Decarbonisation Bank and measures to bolster industrial competitiveness. Public procurement is again positioned as a strategic demand-side lever. The deal proposes introducing sustainability, resilience and ‘made in Europe’ criteria in public contracts to shape markets for resilient clean industry.

– The Startup and Scaleup Strategy (May 2025) aims to make public procurement more accessible for startups and scaleups, including fast-track procedures for R&D services, simplifying access for innovative firms, and coordinated EU actions to support adoption of innovation and scaling in deep-tech fields.

Together, these steps mark a shift: procurement is now part of Europe’s competitiveness and resilience agenda, as well as its circular transition.

2026– The next stop – new legislation In 2026, three major laws are set to reshape Europe’s circular and innovation agenda.

– The forthcomingCircular Economy Act is expected to set binding circularity targets, create a single market for secondary raw materials, and reform producer responsibility schemes. It is also likely to introduce harmonised procurement criteria and digitalised end-of-waste processes, making procurement central to demand for recycled and sustainable products.

– The revision of the EU procurement directives, expected in 2026, will introduce sustainability, resilience and European preference criteria in public contracts, aligning procurement more closely with the EU’s circular and innovation objectives

– The European Innovation Act, also planned for 2026, will address barriers for startups and scaleups, and open space for innovation-friendly procurement through sandboxes and new financing tools.

Taken together, the Circular Economy Act, the new procurement directives and the European Innovation Act set the basis for doubling Europe’s circularity rate and reinforcing strategic autonomy, with policy now moving on a single, connected track.

Looking back on over two decades of EU policy development through the lens of circular procurement also shows how the world has changed, and how the underlying ideas have evolved. From voluntary green pilots, to systemic circular frameworks, and now to a broader focus on resilience and competitiveness under global uncertainty.

Three local stops

Now we continue the journey with a few local stops. The voluntary nature of earlier policies has meant uneven progress across Europe — strong examples in some places, slower uptake in others. Here I want to highlight three examples that show how procurement has helped stimulate the development of circular business models, the topic of the session of my keynote.

Sweden – IT

Malmö rewired its IT tenders to include take-back, repair and reuse. The city had previously bought IT products through a framework agreement with generic sustainability labels, but many old devices ended up in drawers rather than being reused or recycled. In 2018, Malmö changed approach and procured a strategic partner for IT products — combining supply with repair and recycling services. The new agreement included longer warranty periods and requirements on power consumption, eco-labelling and recyclability, pushing manufacturers to extend product lifetimes and improve repair options.

Since then, the number of IT units returned for reuse or recycling has increased from around 5,000 to almost 13,000 per year. Suppliers now earn by keeping products in use instead of selling replacements, showing how procurement can shift incentives and support circular business models.

Netherlands – Office furniture

The Dutch central government ran its first large-scale circular furniture tender, covering more than 100,000 workplaces. Instead of buying new, the contract focused on keeping what they already had in use – through repair, refurbishment and maintenance. Only when new furniture was needed did it have to be designed for reuse and easy disassembly. The shift meant suppliers earned by maintaining and upgrading furniture rather than selling replacements, turning refurbishment into a core business. The tender showed that large-scale circular procurement can both cut costs and change market behaviour, making repair and reuse the new default for office interiors.

Belgium – Construction

In Flanders, more than 360 organisations joined forces under the Green Deal for Circular Construction to put circular principles into daily practice. Through pilot projects, trainings and communities of practice, the initiative explored “design for reuse”, selective demolition and urban mining — showing how buildings can become material banks rather than waste. Contractors, architects, cities and researchers worked together to test new business models, from modular design to shared material hubs. Examples such as Leuven’s circular makerspace and local materials banks show how reclaimed components can cut carbon and create new markets. The pilots helped shape new standards and tools, making circular construction a practical reality across Flanders.

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Lessons learned – both fast tracks and missed stops

Looking back, a few things clearly worked. Framework agreements have helped scale circular pilots. Life-cycle costing has shown that durability and reuse often pay off. Policy alignment has accelerated uptake where circular, innovation, and competitiveness agendas intersect. In recent years, the growing link between procurement and competitiveness has placed demand-side tools firmly on the main track of EU policy

But there are also gaps that keep slowing progress. Green public procurement remains uneven, with big differences between countries and sectors. The flexibility built into the 2014 procurement directives has been underused. Evaluation methods still favour the lowest upfront cost, and there are still barriers related to accounting and insurance for leasing and reuse.

More fundamentally, though, innovation and procurement are still treated as separate tracks. That separation is both a symptom and a cause of the blind spots — it’s what keeps us from seeing how procurement could drive circular innovation processes, And this is what I want to explore in my reflection: how we can rethink circular procurement from an innovation perspective.

My reflections – Rethinking Circular Procurement

Circular procurement processes are almost always described as starting from a need — translating that need into requirements, applying circular principles, and evaluating solutions against them. That approach is of course central, but if we want to achieve truly circular flows, it’s only half the picture. In parallel, we also need to be able to see the material flow as a point of departure — waste streams and existing resources — and explore what value could be created, for whom, and how, building value networks that connect public and private actors around shared resources.

Ghost nets become anti-drone barriers

On Sweden’s west coast, old fishing nets, “ghost nets”, retrieved to protect marine life, were collected by the non-profit Operation Change and sent to Ukraine to be used as camouflage. Once there, volunteers discovered that the tangled, durable nets could do something else entirely — stop drones. What started as waste management became a new form of protection, with hundreds of tons of discarded nets now shielding roads, trenches and vehicles on Ukraine’s front line. The innovation didn’t come from defining a need, translating it into requirements, and evaluating solutions against them. It came from experimenting with a waste resource and discovering new ways it could create value.

What this case shows is the importance of experimentation — with the resource and the material flow at the centre — and how this can lead to circular innovation. If we want procurement to support this kind of entrepreneurial discovery, where value is created from what is otherwise seen as waste, we need to shift perspective and rethink what circular procurement means. To do that, we first need to distinguish between four layers of procurement:

Procurement principles – Foundational values such as equal treatment, transparency, and proportionality, which guide interactions between public buyers and suppliers. These principles are fairly similar across the world, sometimes also including principles of prioritizing domestic products.

Procurement legislation – Translates those principles into rules and procedures. It sets the boundaries for how procurement can be done — who can compete, how contracts are awarded, and how public money should be managed to maintain trust in the system.

Procurement folklore – A term coined by Warren Smith , Posterity Global and co-leader of the UN International Telecommunication Union (ITU) ’United for Smart Sustainable Cities’ (U4SSC) Working Group on ‘Intergenerational Procurement for People-Centred Cities’. The term refers to the informal, often unquestioned narratives within procurement teams that reinforce risk-averse behaviour and maintain the status quo.

Procurement processes – Organisation-specific workflows that turn rules into practice. They are often more restrictive than necessary, designed to ensure compliance but also reinforcing rigid interpretations that limit learning and experimentation.

When working with municipalities and regions, I often hear that procurement stands in the way of innovation. But that can happen at different levels — and it’s a big difference whether something conflicts with internal procurement processes (almost anything new tends to do that) or with the fundamental procurement principles, such as equal treatment. To understand where these perceived clashes actually occur — and how to navigate them — basic public procurement literacy is needed in all roles working with innovation and circularity, both within and close to the public sector.

More fundamentally, innovation logic and procurement logic often pull in different directions. Innovation processes are experimental and unpredictable, while procurement processes are built on predictability — defining needs, translating them into requirements, and evaluating solutions against those requirements. In practice, this separation often blocks experimentation. I would like to propose three concrete ways we need to rethink circular procurement, from a practical, as well as a policy perspective. If we want procurement to play its full role in driving innovation and circularity, a few things need to change.

First, we need to shift our glasses — from seeing the procurement process as the frame, with innovation activities fitted inside it, to seeing the innovation process as the frame, with procurement as one of the activities that can drive it. That means decoupling procurement principles from procurement procedures, and building innovation processes around dialogue, experimentation and co-creation across the value network — before, during and after the procurement itself. In the context of circularity, it also means placing the resource and the material flow at the centre, so that innovation can emerge not only from defined needs but also from the potential of what already exists. And since innovation is inherently uncertain, this shift also requires rethinking the tools we use, how we manage risk, and how we evaluate suppliers and solutions — something I explore further together with Kjell Håkan Närfelt , Vinnova, in our white paper A new perspective on innovation procurement.

Second, we need to stop limiting the view of procurement as an innovation policy instrument to innovation procurement alone. Innovation doesn’t only happen through PPIs and PCPs. Many other procurement procedures and approaches — from framework agreements and dynamic purchasing systems to competitive dialogues, service partnerships and refurbishment models — can drive innovation, and of course, circularity. The choice of procurement procedure is ultimately just an administrative consequence of what you want to achieve.

Third, everyone working with circularity and innovation within, or close to, the public sector needs basic public procurement literacy. Without a shared understanding of the principles, the flexibilities in the rules, and how the processes actually work, innovation and procurement will keep talking past each other. We don’t all need to be procurement specialists, but we do need to understand how communication between the public sector and companies must be managed if we are to take part in processes built on interaction between those experiencing the needs and those developing the solutions — the core of any innovation process, and, as seen in the examples, the key to unlocking circular flows as well.

For readers interested in the broader international perspective, the recent UN-ECE ETIN Policy Paper on Innovation-Enhancing Procurement brings together insights from both transition and developed economies. It is developed within the workstream on Innovation-Enhancing Procurement (IEP) within UN-ECE Transformative Innovation Network (ETIN) , co-lead by Jakob Lindvall and me.

For Taiwan, this is an opportunity to move faster. The new draft Circular Economy Roadmap 2050 already recognises procurement as a key enabler of new business models. Here, we need to learn from each other across countries and continents — not by copying policies, but by sharing what has worked, what hasn’t, and the blind spots we are only beginning to see. The real change won’t come from rules and policy alone; it will come from how procurement is understood and practiced inside organisations.

Because in the end, the question isn’t only how we buy more sustainably — it’s how we use procurement to drive the innovation processes that turn waste into value.

Sources

• OECD (2002). Recommendations on Green Public Procurement.
• European Commission (2008). Communication on Public Procurement for a Better Environment.
• European Commission (2014). Directive 2014/24/EU on Public Procurement.
• European Commission (2015). Closing the Loop – An EU Action Plan for the Circular Economy (CEAP I).
• European Commission (2019). The European Green Deal.
• European Commission (2020). Circular Economy Action Plan II – For a Cleaner and More Competitive Europe.
• European Commission (2022). A New European Innovation Agenda.
• European Parliament and Council (2023). Regulation (EU) 2023/1542 on Batteries and Waste Batteries.
• European Commission (2024). Ecodesign for Sustainable Products Regulation (ESPR).
• European Commission (2024, provisional). Directive on Common Rules Promoting the Repair of Goods (Right to Repair Directive).
• European Commission (2024). Net-Zero Industry Act.
• European Commission (2024). Report by Mario Draghi – The Future of European Competitiveness.
• European Commission (2025). Competitiveness Compass.
• European Commission (2025). Clean Industrial Deal.
• European Commission (2025). Startup and Scaleup Strategy.
• UNECE Transformative Innovation Network (ETIN) (2024). Policy Paper on Innovation-Enhancing Procurement.
• Mälmö Stad (2018). Circular IT Procurement Framework.
• Government of the Netherlands (2020). Circular Procurement of Office Furniture – Rijkswaterstaat Case.
• Circular Flanders (2023). Green Deal on Circular Construction.
• Sweden Herald (2025). Swedish Fishing Nets Repurposed to Defend Against Russian Drones in Ukraine.