Procurements for SEK 683 billions can contribute to circular solutions

Despite high ambitions, Sweden is beginning to fall behind in the transition to a circular sustainable economy. To accelerate the development, Vinnova gathered some of the country's leading experts in the field to discuss how public procurement can be used to increase the demand for circular solutions.

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The value of public procurement in Sweden is estimated to SEK 683 billion per year, or 17.5 percent of Sweden's GDP. At the same time, Sweden's municipalities and county councils account for emissions of 18 million tonnes of carbon dioxide. Public enterprises have as objective to create the conditions for a circular sustainable economy, but many still do not know how. To offer support in the work, Vinnova invited to a meeting where experts could share insights and possible ways forward.

- Such a meeting shows how important it is to meet from different industries and different parts of the economy to talk about these issues. It is collaboration that is needed, so we can never have too many seminars of this kind. Sweden is at a disadvantage on these issues. We have focused too much on household waste and must now focus upstream on what products are sold and what term apply to recycled goods compared to virgin goods, says Anders Wijkman, a social debater who sits on several international councils and has a background as a politician.

Today, a Swedish player is missing, which collects progress that is being made in, for example, the EU. Some who could take some of that responsibility are the government's circular economy delegation.

- The delegation has an assignment as information recipient and distributor. We should not just propose instruments. I think we could do so much more with the public procurement tool to become more circular, ”says Lina Bergström, member of the circular economy delegation.

Circularity starts upstream

One issue that is being debated in Europe, both at national level and within the EU, is to include the perspective of how to recycle the materials to create a circular flow already in the production phase. Instead of focusing on how existing products can be recycled, it would be about how products are designed to be part of a circular flow. Another major challenge that many people work with is how to measure that something is actually circular. Something that RISE has looked into in a research project.

- We have researched what it is that makes a circular procurement successful and in the end it is about being truly circular. If we don't know what it means, we can have as many policies, guidelines and good intentions as possible, says Josefina Sallén, RISE's business developer.

To find out if something is circular, RISE has developed a new measure that has so far been tested together with four municipalities. One of the lessons learned is that it is difficult to add only one point to existing requirements lists during procurement and thus create circular flows. Instead, procurement needs to be redone to focus on function and thus produce greater effects. Then the dimensions still need to be developed and standardized.

- One lesson is that a single measure will probably not suffice. What we need to do is measure utilization over time to see what you need to focus on, says Josefina Sallén.

Feature procurement is about, instead of setting up a requirements list for a product or service, expressing the business's needs in the form of desired functions, effects and results. Örebro municipality has started to use this strategy.

- We do some functional procurement, but could do much more. With us, there is some fear in the business. When we come up with the proposal to do a functional procurement, some people get a little nervous about wanting to set their eligibility requirements, but if they do, we remove the opportunity for the supplier to show the very best option. We need to procure functions much more, says Helena Sköld Lövgren, procurement manager at Örebro municipality.

One of the big problems is finding the time to do a good functional procurement.

- Often the business has a need and when they come to us it is only a few months left. They have not taken into account that we need to start with white paper to find the best solutions available, says Helena Sköld Lövgren.

Functional procurement and national strategy

Although many agree that functional procurement is an important tool to succeed in a circular sustainable economy, the next step is to investigate which areas have the greatest potential. A clear common national strategy for what to prioritize is a way of providing support to municipalities and county councils to make a difference.

- It is important to concentrate on the areas where procurement makes the biggest difference. See where the potential is greatest for circular economy, start by focusing on that area and then move on to the next step. Many people want to start working, but do not really know how to get started, says Annie Stålberg, head of the sustainability unit at the Procurement Authority.

She receives support from environmental consultant Gunnar Fredriksson.

- The area is far too large. We must prioritize and develop a strategy on what things to invest in. I think construction and civil engineering is an important area that can make a big difference, he says.

Innovation through public procurement

A great opportunity when it comes to procurement is to drive innovation by creating a market for new products and services. By changing the way we conduct procurement, and instead focus on function and circular sustainability, new solutions can become industry standards.

- I think it can go incredibly fast sometimes. As is the case with plastic now for example. Instead of plastic pens we had wooden pens today and instead of plastic cutlery at lunch there was wooden cutlery. That trend has been going on for almost a second. If there is enough pressure to do something, the innovation is there. I think innovation is almost never the problem, but it's the pressure to buy the missing one, says Gunnar Fredriksson.

He receives support from several of the seminar participants.
- There is a great opportunity to contribute to innovation through procurement. Then the first phases of the procurement are very important where you have a dialogue with the suppliers and think about function and what you need. There, you can make major changes and open up new business models and give them a basis to develop, says Annie Stålberg.

- To put more eligibility requirements upstream on the design of products and work with functional procurement, I think can drive innovation, says Lina Bergström.

Anders Wijkman also wants to see procurement leading to an increased degree of innovation.

- Technology procurement has been central in Sweden historically and must come again, says Anders Wijkman.

This is circular economy

A circular economy is based on the cycle, instead of the linear \"create, use, throw\". It is about recycling, recycling and sharing to make the best use of the resources we have. It is also about the materials and the energy that has already been used - taking advantage of already made investments and substances high in the value chain.

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Last updated 9 December 2019

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