New circular business models: focus on purchases, work clothing and the textile service industries

The challenge of the City of Herning in the beginning of the project was that all new employees of the technical operations department received brand new work clothes and whenever an employee resigned the clothes were discarded, regardless of the quality. Also when the current textile service contract would expire, all work clothing would be discarded. The discarded work clothes were not recycled. To solve this problem, City of Herning started a circular economy project with the following objectives: • To define operative and objective criteria for reuse of work clothing. • To adjust the current textile service contract in order to introduce a circular economy based model to this specific purchase area. • To develop a general guide for incorporating a circular economy based model into public tenders, which can be used in various purchase areas and by other public entities. • To find commercial recycling solutions for used work clothes. During the first phase the criteria for reuse were defined. User culture, signal value and changing attitude towards used clothes were discussed with the employees. Subsequently, objective criteria in reference to official standards (EN 20471:2013, ISO 105-A02 and A03, SNV 195651) were described (with Danish Technological Institute acting as consultant). Finally, the implementation of procedures and control functions for the criteria were agreed on in cooperation with the textile service company De forenede Dampvaskerier (DFD). The second phase of the project consisted of introducing circular economy aspects to the current contract. In order to transfer work clothes in use to the next contract it was necessary to make an additional contract (allonge) to the current contract. An allonge includes a statement of legal terms and conditions for transferring materials and a calculation model for determining net present value of the materials. The allonge must be mutually approved and legally compliant. The project also compiled a general guide for incorporating a circular economy based model into public tender and contracts (in Danish). The guide is open and accessible to all public entities. The points of attention include: • Topics relevant for introducing a circular economy based model • The importance to consult with the industry before stating conditions! • The need to define criteria and relevance of requirements in relation to circular economy objectives • Tender requirements must be accurately reflected in the contract. • The need for e.g. follow-up clause, penalty provisions or a bonus scheme should be considered to provide incentive for applying the concept of circular economy As part of the project, the recycling of the work clothes was studied by students from VIA University College TEKO. They innovated new options for recycling and conducted open dialogue with a range of relevant industries. Success factors The project has proved that advancing circular economy is possible in practice, including a concrete guide on practical implementation. The developed criteria are based on official standards and therefore widely applicable. Terms of public tendering have been investigated in relation to a circular economy based model, which benefits other public procurers. Key Results and Achievements The main results of the project consist of a set of criteria, a general guide, innovative ideas and actual reuse of textiles. Within the project, it was found out, that logos on the work clothes cause problems for reuse. Hence, a written note on the logo issue has been made, with a recommendation for further study. An economic analysis of the impacts of the circular economy based business model has also been conducted. In addition, the project has promoted dialogue with a number of companies and initiated a study of possibilities of other material reuse with companies (including building materials, insulation, furniture industry and fabrics). Novelty: The project contained an element of novelty in the form of the criteria for recycling and disposal of work clothes and a general guide for implementation of a circular economy based model in public procurement. Both the criteria and the guide serve as a basis to build circular economy based models also in other industries and municipalities. From an innovation perspective, VIA University students also created a hundred innovative ideas and 17 recycled products during the project. Sustainability Impacts: Possible economic and ecological impacts were calculated during the project by FORCE Technology. Reuse of work clothes and transfer of work clothes, from the current contract to the next, would save 6 700 Euros and 1 011 tonnes of CO2 in a 4 year period in Herning's technical operations department alone. This indicates a significant potential for financial savings and CO2-reduction by disseminating the circular economy based model to other public procurement areas. The project also had positive social impacts through the dialogue conducted to define the criteria of reuse. A joint discussion among the workers of the technical department included issues such as the protection factor of the clothes, impacts for the environment and whether the workers feel comfortable using clothes that others have worn. Cost-effectiveness: As calculated by FORCE Technology, the possible economic impacts of the project in a 4 year period would be 6 700 Euros in money saved. This number describes the savings made in service provider's costs, which in turn benefits the municipality through reduced price of the service. More specific calculations will be available after the four years' follow-up period in 2017. Challenges and potential for further development: The concept of circular economy seemed to work in principle and have clear benefits. However, some challenges remain: • Material transfer from old to new clothes, recycling of the fibers • Value assessment of the clothes: washing, tracing system, etc. • Technical challenges: logos, colours, sizes, zippers and buttons, etc. • To find a commercially viable business concept The City of Herning has introduced the concept of circular economy to other new tender processes. The City of Herning also plans to look at circular economy in a broader sense, including the aspects of commercial applications and business development. Contact person for more information: Merete Gammelmark, City of Herning, bekmg@herning.dk