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Usership Instead of Ownership: Establishing a New Business Model for Circular Procurement

Background and Goals

  1. Circular procurement, also known as "leasing instead of buying," shifts the focus from ownership to usage rights. This model encourages consumers to avoid purchasing products they only need occasionally, preventing them from discarding perfectly functional items prematurely. It allows consumers to access higher-quality products at reasonable prices while saving costs.
  2. Taiwan Sugar Corporation (TSC) is taking the lead by embracing circular procurement practices and actively seeking opportunities within its existing business operations. The aim is to spark a transformation in consumer thinking and behavior in Taiwan, establishing a new benchmark for circular economy business models.

Implementation Progress

  1. Taking TSC's energy-efficient light rental program as an example, the company has implemented energy-efficient lighting upgrades in line with the government's "Energy Conservation Action Plan for Government Agencies and Schools." This initiative enhances lighting efficiency, reduces electricity consumption, minimizes CO2 emissions, and effectively addresses energy concerns. It has also significantly improved energy conservation and carbon reduction benefits. The "leasing instead of buying" model has been adopted at the TSC Head Office, Taipei Office, various business divisions, and regional offices. Used components are recycled and reused by the supplier, demonstrating the principles of a circular economy.
  2. After replacing traditional lighting fixtures with LED energy-efficient lights at the TSC Head Office, annual electricity consumption has decreased by nearly 260,000 kWh, resulting in electricity cost savings of approximately NT$775,000. Additionally, annual carbon emissions have reduced by approximately 171,000 kilograms, equivalent to the annual carbon sequestration of a 15-hectare forest.

Future Development

  1. For the procurement of common equipment, such as air conditioning units for offices, TSC will adopt the "leasing instead of buying" model. Suppliers will be responsible for maintenance to ensure efficient operation, and the equipment will be recycled by the suppliers after its lifecycle.
  2. When implementing investment projects, equipment will be financed and constructed by the supplier, with TSC paying a usage fee. This mutually beneficial arrangement fosters collaboration between both parties.
Building a New Business Model of Circular Procurement

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