Municipal procurement driving the shift towards a circular economy in Europe

Kiertotalous on usein esitetty teknisenä ratkaisuna, mutta todellinen pullonkaula löytyy toisaalta: siitä, kuka maksaa. In practice, the challenge is not simply whether materials can be recovered, sorted or remanufactured, but whether the business model works well enough for someone to do it at scale.

That distinction matters because circularity is not one market. High-value materials such as battery metals and other critical raw materials can often pay for their own recover...

y. In those cases, the economics line up with the engineering. But in lower-value streams, including aggregates, asphalt and demolition concrete, recycled material can struggle to compete with virgin inputs on price alone. The environmental cost of extracting new material is rarely reflected fully in the market price, while the costs of collection, testing and processing recycled material arrive immediately and visibly.

That is why circular economy policy increasingly turns on procurement. A report on municipal policy from the European Circular Economy Stakeholder Platform says local authorities can shape circular markets through their purchasing power, using regulatory, economic and supportive measures to stimulate repair, recycling and circular design, while also attracting investment and jobs. Research published in the Journal of Industrial Ecology similarly argues that public procurement remains underused, even though it can help close material loops and reduce waste. In other words, municipalities are not just cheerleaders for circularity; they are often the customer that makes it viable.

The Lahti example cited in the original column illustrates the point well. A trial on Aleksanterinkatu showed that when a city specifically asks for recycled asphalt, a company can begin to recover its costs. The move from principle to purchase is what changes the equation. Circular products do not become commercially sustainable because of good intentions alone; they become sustainable when demand is written into the contract.

That is where the EU taxonomy comes in. The taxonomy was designed to define what counts as sustainable and to steer capital towards it, and its technical screening criteria are already close to the language used in tender documents. Requirements on recycled content, repairability and leasing can all be translated into procurement terms. For new structural road elements, for example, the criteria call for at least 50 per cent of mass to come from reused or recycled material, and they also set limits on transport distance so that emissions from hauling material do not cancel out the environmental gain. The effect is to strengthen local sourcing while making sustainability measurable rather than rhetorical.

Finland already has examples showing how this can work. The European Commission has highlighted Tampere’s Yliopistonkatu street project as a landmark in circular public procurement, using a design-and-build model with reuse and waste minimisation built into the brief. The city’s approach demonstrated that circular infrastructure is not a theoretical ambition but a practical one, provided the criteria are clear enough to drive industry response. An OECD report on Jyväskylä, by contrast, found that circular projects there often operate in parallel without a strong common strategy, and that the absence of clear guidance in areas such as procurement, construction and demolition makes it harder to build a citywide circular model.

The lesson is straightforward. Municipalities do not need to invent a new theory of circularity, nor do they necessarily need new subsidies or new technology. What they need is to stop treating price as the only criterion. When tenders are written to value life-cycle impact, durability and reuse, the lower-value end of the circular economy gets a chance to pay its own way.

The real policy lever is not another law. It is the purchasing decision.

Source: Noah Wire Services