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Financing of circular procurement

If you want to make a business case for a circular procurement project, the costs and benefits must be weighed up in the longer term.

  • Rethinking the need is a first part of the business case for circular procurement. Internal sharing, for example, can reduce the need to purchase.
  • A Total Cost of Ownership analysis (TCO) often gives a very different picture than comparisons on the costs of the initial investment alone. TCO also identifies all the costs over the useful life, such as acquisition costs, operating costs (energy consumption and other resources, among others), maintenance and repair costs, taxes and the costs or revenues associated with end-of-use. With TCO, the real costs of different scenarios over the lifespan can be compared. Try to base your TCO calculations on the available real data as much as possible, but sometimes you may have to make an estimate.
  • Life Cycle Cost (LCC) can also include environmental and social costs related to the product, service or work during the life cycle. These could include, for example, the costs of greenhouse gas emissions and toxic substances. The European Commission has developed an LCC tool for five products.

 

  • Take into account any residual value at the end of use. The buyback can be included in the contract.
  • Consider alternatives to ownership, such as as-a-service models, and check if you can use other budgets within your organisation. One possibility is including maintenance costs in the circular procurement.

Publications about financing circular procurements

 

The transition to a Circular Economy requires innovative business models that stimulate optimised use of repairable products, reusable components and recycling of materials. A Community of Practice (…

 

A state of the art report on LCC published by ICLEI

 

This report presents the findings of work which estimates the value of a range of consumer electronics products following their first sale, alongside the estimated cost of recovering those products a…

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the user guide for the LCC tool for G…

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the LCC tool for GPP of road lighting…

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the user guide for the LCC for GPP fo…

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the LCC tool for GPP for Indoor Light…

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the user guide for the LCC tool for G…

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the LCC tool for GPP of computers and…

 

The European Commission have developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the users guide for the LCC tool for…

 

The European Commission have developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This the LCC tool for GPP of Imaging Equipme…

 

The European Commission developed a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the user guide to the LCC tool for GPP of …

 

The European Commission has developped a series of sector specific LCC calculation tools which aim to facilitate the use of LCC amongst public procurers. This is the LCC tool for the GPP of vending m…