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Innovative services and products for the circular economy – insights from Horizon 2020 projects

Taking the momentum of the European Commission launching the new EU growth strategy, the European Green Deal, over 120 project representatives and policymakers gathered at the Workshop “Innovative services and products for the circular economy” organised by EASME in Brussels. This workshop gathered important insights to feed the current policymaking, days before the publication of the new Circular Economy Action plan and the New Industrial Strategy for Europe.

Horizon 2020 projects discussed their achievements and challenges in advancing innovative business models (e.g. product-as-a-service, functional sales, take-back schemes, repair, remanufacturing, etc.) for the circular economy in key sectors: electrical and electronic equipment, construction, buildings, mobility and energy. 

Key take aways

  • Substantial impact will happen only if a systemic approach is embraced together with active stakeholder participation along the entire value chain, including full involvement of industry. 
  • Panellists highlighted co-creation approaches, for example through Living Labs and Innovation Camps among others, as a means to bring the end-users to the core of the whole system innovation to integrate their feedback in different lifetimes of products. Funding support is needed to further develop large-scale demonstration projects to capture “on the ground” realities and showcase the economic and environmental feasibility of circular business cases.
  • There is a need for a paradigm shift in order to mainstream “circular thinking” to support the development of innovative products and services. Eco-design for recycling, reuse and repair is critical to make sustainable and circular products, but it is not enough and attention should be paid to developing solutions for end-of-life products. Certification and standardisation activities are key to promote sustainable product design and value chain management practices and to bring solutions closer to the market.
  • Digital tools, such as platforms, big data, block chain technology, among others, are enablers of business model innovations to ensure data traceability and transparency, as well as to engage stakeholders throughout the value chain.

Panel discussions

In the first panel, projects C-SERVEES, ReCiPSS and CIRC4LIFE, which focus on electric and electronic equipment, debated their findings.
Projects highlighted many environmental, social and economic benefits from advancing product-service-systems. One particular advantage is that manufacturers are the product owners and have the knowledge of the product composition. Thus, they are best placed to handle end-of-life products by refurbishing, remanufacturing or recycling these products.

At the same time, product-service-system cannot be seen as the “holy grail” for achieving circularity. There is less interest in developing service-based business models to customers as electronic products are relatively cheap and already last long. However, it is unclear, for the time being, whether business opportunities are limited due to a lack of consumers demand or rather due to limited offering of products and competitive solutions on the market. In any case, this remain a valid concern for the mainstreaming of service-based models especially for low value products. 

It was also argued that applying different incentive means and structures (for example, eco-points, eco-accounting, eco credits/debits) can help get customers on board with these new business models.

In the second panel the projects CIRCUSOL, CarE-Service, CINDERELA and HOUSEFUL discussed about the implementation opportunities and challenges in the area of construction, buildings, mobility and clean energy. 

It was stressed that data sharing and transparency as well as stakeholder coordination and communication are key, in order to organise activities along the value chain and optimise reverse logistics, reuse, repair or remanufacturing of products. 

A common barrier is the general reluctance of companies operating in well-established value chains to move towards new business models. The use of Life Cycle Analysis (LCA) and Life Cycle Costing (LCC) tools is often challenging, but necessary, because environmental costs and benefits should be well accounted for and taken into account for establishing sustainable product-as-service models. 
Participants agreed on the importance of an ambitious and stable regulatory environment to incentivise product-as-a-service solutions.

The discussions highlighted a need for first-hand evidence of the environmental benefits but also the economic case of using service-based models for the transition to a circular economy.
Furthermore, the importance of dissemination and communication activities through dedicated policy briefs produced by projects was underlined. At policy level, the importance of product-service-systems is now emphasized in the newly unveiled Circular Economy Action Plan.

The event ended with an exhibition where projects displayed their results in dedicated “knowledge stations”.

Projects and speakers

Panel on Innovative solutions for circular services and products with focus on electric and electronic equipment

  • Enrique Moliner from C-Servees – Activating Circular Services in the Electric and Electronic Sector 
  • Amir Rashid from ReCiPSS – Resource-efficient Circular Product-Service Systems 
  • Daizhong Su from CIRC4LIFE – A circular economy approach for lifecycles of products and services 

Panel on Innovative solutions for circular services and products with focus on buildings, mobility and clean energy

  • Tom Rommens from CIRCUSOL – Circular business models for the solar power industry
  • Giacomo Copani from Car E-service – Circular Economy Business Models for innovative hybrid and electric mobility through advanced reuse and remanufacturing technologies and services
  • Alenka Mauko from CINDERELA – New Circular Economy Business Model for More Sustainable Urban Construction
  • Sergio Martinez Lozano from HOUSEFUL – Innovative circular solutions and services for new business opportunities in the EU housing sector

Background information

(Reference article)