Product-as-a-Service (PaaS) models are gaining attention as a potential enabler of the circular economy. They refer to using a product through a subscription contract for a determined period of time, before returning it to the supplier.
Using a handheld vacuum cleaner as a case study, JRC scientists carried out a first science-for-policy assessment of a PaaS business model applied to a household appliance in the EU market.
According to the analysis performed, a well-designed PaaS can improve the efficient use of critical raw materials. The data on the material flow show that the collection rate of end-of-use purchased products is 41%, while in the case of PaaS it is 100%. The extraction rate of components is 70% vs 100% for PaaS and the reuse rate of components is 0% vs 90% for PaaS.
Comparing PaaS with traditional product sales
In the case study, researchers examined a handheld vacuum cleaner offered through a subscription model and compared it with a standard, one-off sale of a product. Using material flow analysis, the study quantified how much aluminium, copper, cobalt, lithium, neodymium, and other materials flow through both systems over the product’s lifetime.
Under realistic assumptions, the PaaS scenario achieved higher collection, component extraction and reuse rates – all crucial steps for improving circularity of critical raw materials.
As shown in the table below, in the one-off sales model, each component shows a baseline material inflow of 100%. In the PaaS scenario, these inflows fall significantly — to 75% for aluminium and copper parts, 97% for the battery, and 50% for both the motor and the printed wiring board. Lower inflow percentages indicate that fewer new materials are needed over the product’s lifetime thanks to component reuse and better recovery.
Overall results of the material flow analysis. Landfill also includes other processes such as illegal disposal.
Source: JRC elaboration.
The table above also shows how much material ends up in recycling versus landfill. In the traditional sales model, most components ultimately go to landfill: 82% of aluminium and copper, 91% of the battery materials, and nearly 100% of materials in the motor and printed wiring board.
The PaaS model instead shows a higher share of materials reaching recycling . The service provider namely ensures full product return and can extract components more efficiently. As a result, less material is lost and more can re-enter the supply chain, improving circularity for the critical raw materials essential to EU industry.
Why PaaS can outperform sales models
Because suppliers retain product ownership, PaaS offers better control over design, maintenance, end-of-use handling, and component harvesting. In the case of the handheld vacuum cleaner, batteries, motors and printed wiring boards all showed lower material inflows in the PaaS scenario, indicating more efficient use of critical raw materials. The study also identifies the design parameters that most influence resource efficiency: component lifetime, reuse rates, product lifetime in service, and material recovery rates. This evidence supports the need for robust metrics to compare different types of PaaS offerings.
Implications for EU industry and policy
The research highlights opportunities for suppliers to improve resource efficiency by extending product lifetimes, designing components for reuse, and optimising service delivery. For policymakers, the findings underline the need to integrate PaaS more explicitly into circular economy strategies—particularly in EU policies addressing critical raw materials, ecodesign, and extended producer responsibility. Fair and transparent assessment or labelling schemes could also help consumers compare sustainability performance across business models.
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