Traditional purchasing strategies focus on availability, efficiency, and price. Yet, with a view to reducing dependence on primary raw materials, rising world market prices, and ESG commitments, a new procurement concept that is based on the principles of the circular economy is coming into focus: circular procurement. Instead of disposing of resources after a single use, the focus is set on recycling, reuse, and value-preserving processes such as remanufacturing. In this context, raw materials become circulating assets, and products become temporary resource stores. We discuss how this paradigm shift in purchasing creates a sustainable connection between materials, products and processes.
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Regulatory impulses and trends
With its planned Circular Economy Act, the EU is pushing ahead with the creation of a single market for secondary materials and binding requirements for circular procurement (consultation until November 6, 2025). At the same time, in September 2025, the German government reformed the Supply Chain Due Diligence Act and adapted it to the EU CSRD. Further, the EU project “Circular Shift” supports public organizations in systematically anchoring circular procurement.
These developments clearly demonstrate that circular procurement is no longer just a voluntary sustainability initiative, but is increasingly becoming the regulatory and market economy standard.
How your company benefits from circular procurement
Circular procurement is increasingly becoming a strategic advantage for your company. Especially in material-intensive industries or those with strict ESG requirements, circular procurement offers clear added value: Less dependence on primary raw materials and fluctuating world market prices stabilizes costs. At the same time, transparent proofs of origin and CO2-reduced supply chains enable visible differentiation from the competition.
The approach is also attractive from a risk perspective, as circular material cycles reduce geopolitical dependencies and cushion supply uncertainties. Additionally, there is increased compliance aussurance – for example, with regard to recycling rates, the EU taxonomy or the requirements of the CSRD. New business models are also emerging in the aftermarket: processes such as remanufacturing, refurbishment, or take-back programs can be conceived as integrated business models and have both ecological and economic impact.
From consumption to circular use
Circular procurement means that material flows are designed in such a way that products, components, and raw materials remain reusable for multiple utilizations. The idea behind this approach is quite simple: Resources should not only be procured and consumed, but also purchased in such a way that their return is already part of the strategy. This creates new requirements for supplier selection (e.g., proof of circular competencies, transparency in material flows, and returnability), specifications, contract design, and digital controllability.
Typical elements of circular procurement at a glance:
- With Design for Circularity, products are specified in such a way that they can be easily disassembled, repaired, or remanufactured.
- Contracts with a buy-back function include repurchasing agreements for materials or components.
- Purchasing guidelines such as recycled content define target values for reused or recycled components.
- Service-based models procure rights of use or functional availability (e.g., “product-as-a-service”) instead of purchasing products.
These principles require a different supplier evaluation and a deeper understanding of material and life cycle data.
Redefining purchasing – adapting new skills and processes
Since it changes fundamental structures and processes, it is important not to view circular procurement as an additional component within traditional purchasing approaches. In addition to function and price, material requirements are now also defined according to reusability, recyclability, and circularity. Furthermore, contracts, pricing models, and contractual relationships must take into account the entire life cycle of a product.
This transformation calls for new skills in purchasing. It requires expanded expertise in material composition, recycling, and reuse, as well as the ability to develop circular solutions, for example, within the framework of “design for reuse.” Digital systems for tracking material flows are becoming just as important as adapted evaluation criteria that make ecological sustainability and circular contributions measurable. Purchasing is thus becoming a strategic driver of sustainable value creation.
Digital SCM – sustainability becomes measurable
Circular procurement only truly takes effect when processes are digitally supported. This in turn requires end-to-end transparency, high data availability, as well as intelligent decision-making logic. Digital supply chain management platforms create this basis: they connect stakeholders and enable dynamic responses throughout the entire product life cycle. Sustainability is therefore turned into a controllable system that can combine ecological and economic objectives.
Four technological pillars of circular platform solutions
- Material traceability ensures that raw materials and components remain uniquely identifiable across batches, products, and usage phases.
- Scenario simulations using digital twins allow to analyze take-back, repair, and refurbishment options in advance and thus transparently weigh their sustainable effects.
- The integration of external data sources, such as CO2 emissions, recycling rates, or legal frameworks, provides a sound basis for decision-making across circular supply networks.
- Digital SCM control enables your company to coordinate circular material flows in a scalable and flexible manner in real time, across locations, time zones, partners, and systems.
These dynamics result in return and utilization concepts that close cycles, conserve resources, and at the same time create regulatory certainty.
What does your company need for successful circular procurement?
Last but not least, when it comes to circular procurement, reliable cooperation is crucial. Your company needs supply chain partners who are willing to follow circular paths, for example through design adjustments, take-back or exchange agreements and programs. Important prerequisites include:
- Joint roadmaps for circularity,
- contractually regulated return logistics,
- digital interfaces for circular KPIs
- and transparent communication along the supply chain.
SupplyX has established trusted partnerships and the necessary technological infrastructure in order to provide you with logistical, technical, and organizational interfaces along the supply chain.
Conclusion: Circular procurement as the future of purchasing strategy
Circular procurement shifts the focus from one-off transactions to sustainable relationships between materials, products, and processes. It brings together environmental responsibility and economic objectives in a model that strengthens resource efficiency and market resilience. This reflects a key paradigm shift in purchasing: away from a linear consumption philosophy and toward a systematic understanding of material value and resource circulation.