Trading Services for a Circular Economy

The report examines how services—ranging from R&D and IT to waste management and repair—enable circular economy business models. Based on a survey of 96 firms, it finds that approximately 70% of circular service providers export their services, often via digital means (Mode 1) or foreign subsidiaries (Mode 3). The study highlights that micro and small enterprises are disproportionately active in this trade. Key barriers identified include divergent national regulations on waste and secondary materials, as well as data flow restrictions. The authors argue for an integrated trade policy that liberalizes both goods and services simultaneously to accelerate the global transition to a circular economy.

• A significant majority of firms providing services related to the circular economy engage in international trade, with around 70% reporting sales to foreign customers.
• Micro and small enterprises (MSMEs) are highly active in circular services trade, with about 60% of service exporters falling into this size category; notably, half of these small firms maintain foreign subsidiaries.
• The most frequently traded services related to the circular economy include IT services, R&D, leasing or rental without an operator, maintenance and repair, and sewage and waste collection.
• Digital delivery (Mode 1) and commercial presence via subsidiaries (Mode 3) are the dominant modes of supply for circular services, with 55% and 45% of respondents using them respectively.
• Regulatory divergence is the primary barrier to trade, particularly regarding the classification and trade of waste and secondary materials, affecting over 25% of respondents.
• Digitalization is a critical enabler of the circular economy, allowing for the creation of new services like ride-sharing and the cheaper cross-border delivery of traditional engineering services.
• The report argues that trade liberalization for circular economy goods, such as scrap and recycled materials, is most effective when associated services are liberalized simultaneously through an integrated approach.
• Customer demand is identified as the primary driver for the growth of circular economy solutions, cited by over 50% of firms.

APA

Tamminen, S., Sell, M., Forslund, T., Tipping, A., Soprana, M., & Bellmann, C. (2020). Trading Services for a Circular Economy. International Institute for Sustainable Development. https://www.iisd.org/system/files/2020-10/trading-services-circular-economy.pdf

Chicago

Tamminen, Saara, Malena Sell, Tim Forslund, Alice Tipping, Marta Soprana, and Christophe Bellmann. Trading Services for a Circular Economy. International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/2020-10/trading-services-circular-economy.pdf.

Wikipedia

{{cite report |last1=Tamminen |first1=Saara |last2=Sell |first2=Malena |last3=Forslund |first3=Tim |last4=Tipping |first4=Alice |last5=Soprana |first5=Marta |last6=Bellmann |first6=Christophe |title=Trading Services for a Circular Economy |publisher=International Institute for Sustainable Development |date=October 2020 |url=https://www.iisd.org/system/files/2020-10/trading-services-circular-economy.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tamminen2020trading, author = {Tamminen, Saara and Sell, Malena and Forslund, Tim and Tipping, Alice and Soprana, Marta and Bellmann, Christophe}, title = {{Trading Services for a Circular Economy}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = oct, url = {https://www.iisd.org/system/files/2020-10/trading-services-circular-economy.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }