The world creates more than 2 billion tonnes of waste annually, a figure set to rise a further 70% by 2050 – despite the Paris Agreement’s goal of reaching net zero the same year. This relentless rise in waste highlights a long-standing challenge for businesses across Europe: our current “take-make-dispose” model is unsustainable.
Addressing the world’s waste crisis requires a full-scale rethink of how businesses source, design, and manage materials, alongside giving existing products a longer life and reducing the consumption of virgin resources.
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Towns and cities across Europe are setting the pace, with the City of Amsterdam being the first city to commit to building a circular economy, followed by Copenhagen, Gothenburg, and most recently, the City of London. In this system, resources are used again and again to extract maximum value, before becoming waste and then being recycled for their parts.
But while many governments are pushing for change, businesses still face hurdles in implementing circular economy models. High upfront costs, plus legacy business models rooted in ownership mean for many, it can be difficult to turn circularity into more than just hot air.
However, the opportunity is massive. Today, the global economy is only 7.2% circular – leaving vast potential to tap into new revenue streams and extend the lifecycle of products and resources. Leasing and Product-as-a-Service (PaaS) models can move the needle, giving businesses the practical solutions they need to implement circularity across their value chains, minus the heavy capital investment.
Thinking beyond ownership
Regulatory shifts are pushing organisations to commit to transforming their operations in line with circular economy principles. For instance, the EU’s Packaging and Packaging Waste Regulation (PPWR) introduced in February 2025 offers extensive measures to promote, reuse and refill alternatives instead of single-use options, enhancing resource efficiency and encouraging manufacturers to ‘think circular’ when it comes to materials.
However, financial barriers remain a challenge. That said, sustainable technologies and equipment no longer have to come with the heavy financial burden of costly upfront investments. In a PaaS model, companies pay for the service or outcomes provided by a product, instead of owning assets outright. Predictable, planned payments help free up cash flow and reduce financial risk. These models help democratise access to cutting-edge technology and equipment, while also being an enabler of circularity.
Beyond affordability, these models can also provide value-added services such as maintenance, operational support, and training – further smoothing the transition to circularity.
To accelerate the transition to a circular economy, the leasing industry must take the lead in educating businesses on its benefits. It should look to demonstrate not only why circularity makes economic and environmental sense, but also how they can implement it effectively.
Driving circularity in a carbon-intensive industry – construction
The benefits of leasing and PaaS models in driving circular economy principles can be felt in several sectors – especially those that have a high environmental impact. The construction industry is known for having a hefty environmental footprint, given its reliance on a linear model, with a high consumption of heavily emitting building materials like cement, steel, and aluminium.
As urban areas expand, the demand for infrastructure like schools, hospitals, and roads is growing. At the same time, ageing infrastructure needs maintenance and upgrades. Huge investment is being channelled into sustainable infrastructure projects, and reducing emissions and waste is a priority.
Take the production of new construction equipment, for example. Manufacturing new construction equipment is extremely resource-intensive, coupled with the ongoing supply challenges making it more difficult to source raw materials. Businesses are exploring PaaS models to close the loop on resources used in the original manufacturing process, allowing producers to reclaim valuable materials at the end of the equipment’s life, which can then be returned, refurbished, and reused. This approach significantly reduces material waste and minimises the carbon footprint of producing construction equipment, helping firms meet sustainability targets.
Modernising through circular solutions – farming
Agriculture is another sector where PaaS is unlocking circularity by making sustainable practices more accessible. Innovation in farming has accelerated in recent years, with a boom in precision agriculture tools helping to cut the use of pesticides and fertilisers, reduce water waste, protect soil and air quality, and lower emissions. Yet traditionally, high costs have made it difficult for farmers to invest in this modern, eco-friendly equipment.
PaaS models are playing a key role in breaking down these financial barriers. By leasing advanced machinery, such as seeders and sprayers, farmers can enhance efficiency and reduce resource waste, all without heavy upfront investments. Moreover, PaaS ensures that farm machinery is designed for longevity, with built-in maintenance and refurbishing options that support a circular approach. At the end of an asset’s life, manufacturers can reclaim valuable components, reducing reliance on virgin materials and enhancing supply chain resilience – strengthening the agricultural sector’s contribution to a circular economy.
The future is circular
Organisations have a real opportunity to transform their operations in line with circular economy principles – not only to meet regulatory obligations, but also to cut emissions and waste in carbon-intensive industries and drive long-term resilience for businesses.
Leasing and PaaS models are powerful enablers of this transition. Traditional ownership models cannot provide the same flexibility that businesses need to adapt in an increasingly circular world. It’s time for businesses to follow the lead of pioneering cities and industries, embracing circularity as a core principle.
Neil Pein is CEO at BNP Paribas Leasing Solutions
