The Transition towards Circular Economy in the Dutch Built Environment

Abstract

The current industrial system is established on one fundamental characteristic: a linear model of resource consumption that follows a ‘take-make-dispose’ pattern. However, the emerging concept of Circular Economy (CE) is proposed to change the current production and consumption patterns that put a significant burden on our planet and its environmental capacity. In this context, scholars argue that the built environment is one of the key sectors that can benefit maximally from the development of CE. The Dutch government recognized this opportunity and in the publication of the Transition Agenda: Circular Economy in the Netherlands by 2050 acknowledged the construction industry as one of the five key economic sectors and value chains which will be the first to make the shift. In order to support the transition towards a circular built environment, experts from academia, policy, and business advocate that innovative business models that allow new ownership relationships are required. In this context, scholars argue that a promising business models for the implementation of circular economy thinking in the sector are product-service systems. This research focuses on buildings which are considered the most complex element within the built environment. Literature on the application of circular economy for buildings suggests looking at them as a collection of interlinking layers. This idea based on the “6S” framework developed by Stewart Brand in 1990s which includes six layers, namely: Site, Structure, Skin, Services, Space Plan, and Stuff. However, researchers argue that there is still great uncertainty regarding the application of circular business models in the Dutch built environment, as well as the fact that the transition from traditional product-oriented business models to service-oriented ones is highly complex and contextual illustrates that further research is required in this area. Therefore, the objective of this thesis is to examine the application of product-service systems as circular business models for the products, components and materials in buildings’ Structure, Skin and Services layers in order to contribute to the Dutch built environment’s shift towards circular economy. As a result, the main research question formulated is: “What is the current state of product-service systems as circular business models in the built environment and how can its application contribute to a circular built environment?” For answering the research question a literature review was conducted in order to examine the relevant concepts, along with expert interviews with the aim to explore the barriers, enablers and opportunities of the application of product-service systems as circular business models. Finally, a case study survey was carried out with the aim to analyze the business models of two companies who are active in the built environment and have successfully applied product-service systems as circular business models. The analysis illustrated that even though numerous opportunities are offered by this business model to both the company and the client when applied in the different building layers, it is not yet accepted in the sector and its application is hindered by several barriers. However, a number of enablers which can facilitate the implementation of product-service systems as circular business models were recognized. In addition, the analysis illustrated that for the successful implementation of product-service systems as circular business model incorporating servitization and circularity characteristics in all business model elements is necessary.