Paying to use a product for a limited period of time, and then returning it to the supplier, can significantly increase the collection and reuse of raw and critical materials compared to a traditionally sold product. This strategy, known as the Product-as-a-Service (PaaS) business model, involves using a product through a subscription for a set period before returning it to the provider. Joint Research Centre (JRC) scientists have, for the first time, assessed the benefits of applying this model to a handheld vacuum cleaner.

According to the analysis, a well-designed PaaS can improve the efficient use of critical raw materials. While the collection rate for products sold through traditional sales is 41%, in the PaaS model it can reach 100%. Moreover, the component extraction rate in the traditional model is 70%, compared to 100% in PaaS; the component reuse rate is 0% in the traditional model versus 90% in PaaS. More information here.

Using material flow analysis, JRC scientists quantified the amount of aluminium, copper, cobalt, lithium, neodymium, and other materials circulating through each system over the product’s lifetime. Based on realistic assumptions, the PaaS model achieved higher collection, extraction, and component reuse rates, all crucial for improving the circularity of critical raw materials.

Regarding material inflows, in the one-off sales model each component shows a 100% material inflow; in the PaaS scenario, inflows drop to 75% for aluminium and copper, 97% for the battery, and 50% for both the motor and the printed wiring board. In other words, the subscription model requires fewer new materials over the product’s life cycle, thanks to component reuse and better material recovery.

Conversely, in the traditional model most components end up in landfills: 82% of aluminium and copper, 91% of battery materials, and almost 100% of motor and printed circuit materials. In the PaaS model, a much higher proportion of materials is recycled because the service provider 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 the circularity of critical raw materials essential for industry.

Advantages of the PaaS model

In PaaS, the provider retains product ownership, allowing greater control over design, maintenance, end-of-life management, and component recovery. The study highlights opportunities for suppliers to extend product lifetimes, design components for reuse, and optimize service delivery.

As a recommendation for policymakers, the JRC emphasizes the need to integrate PaaS more explicitly into circular economy strategies, particularly in European policies related to critical raw materials, ecodesign, and extended producer responsibility.