Circular purchases and total economy go hand in hand
Reference: The Ministry of Environment of Denmark
How do you find the potential for circular purchases in public sector? Through a thorough analysis of relevant products based on the involvement of stakeholders. Viegand Maagøe has examined the use of circular economy and total economy in purchases for the public sector at The Ministry of Environment of Denmark.
How we completed the assignment
The Ministry of Environment of Denmark wished to examine the potential of circular purchases and the use of total economy as an award criterion in public procurement.
Viegand Maagøe calculated the total economy, social economy, and climate impact of circular purchases in 8 different product categories.
We chose product categories with the involvement of public purchasers and the monitor group of the project and used criteria on e.g. environmental impact and the volume of purchase. The analysis consisted of prices from purchasers, suppliers and SKI, and evaluating of possible circular business models in cooperation with a range of suppliers.
Business models and solutions were set up for each product area and calculated on i.a.:
- Purchase and leasing prices
- Consumption in the operational phase
- Disposal or resale
- Environmental and climate impact in the form of emissions of CO2, SO2 and particles
Reference: The Ministry of Environment of Denmark
Contract period: 2019-2020
Results
It was concluded that circular purchases (Danish material) do pay off because there was a correlation between the lowest total economy prices and the lowest climate impacts. It also turned out that it is possible for the Public Procurement Act to make supplies with total economy including carbon price as award criterion. It became the focus for a major article in Klimamonitor (Danish article) and a headline in The Ministry of Environment of Denmark(Danish article).
The reports gave comparable calculations for the price and climate impact through different business models and products such as:
- New purchases, reuse and leasing of white goods, computers, lighting, and furniture
- Petrol vs. electric cars
- One-time use vs. reusable mugs
We organized the calculations so that they correspond to a typical purchase in e.g. a municipality. Thus, they can be used as a case of inspiration in the design of future supplies.
Also, the report (Danish material) about total economy gave recommendations as to where and how to increase the use of total economy as an award criterion in purchases done by the public sector. It showed that all the examined types of products got cheaper through use of total economy as a criterion.
