Circular economy

Leasing and automotive rental firms are asset specialists, therefore managing these assets throughout their lifecycle is very much at the heart of their business. When it comes to promoting a circular economy, lessors have a key role to play as asset owners but also in promoting a culture of usage as opposed to ownership.

Circle roundabout with cars and trees

Leasing is an ideal promoter of circular models

Leasing and automotive rental are -by their very nature- circular, since the primary goal of companies active in these sectors is to ensure their assets remain in good working condition for as long as possible. The leasing and automotive rental industry can also help promote the circular economy through encouraging customers towards use as opposed to asset purchase. This massively reduces the amount of wasted resources since customers no longer dispose of assets once they have finished using them. Instead, customers simply return the asset to the leasing or rental company, who are well placed to either re-lease the asset to another customer, re-sell the asset, refurbish it for a second/third life cycle, or (where appropriate) dispose of or recycle the asset safely.

At the end of 2019, the European Commission unveiled their long awaited European Green Deal, a package of measures aimed at making the European economy more sustainable. One of the central elements of this package is the Circular Economy Action Plan, based on the idea that resources should be used efficiently, with every phase in a products’ life cycle being designed to ensure the product, and it’s individual components, are used to their maximum potential. Leaseurope is working to ensure that the important contribution of leasing and automotive rental is this area is strengthened and promoted.

Sustainability image in paper

Key priorities

  • Contribute to the interpretation of the EU’s taxonomy on sustainable activities, so that it recognises the role the leasing industry can play in allowing industries explicitly recognised as an important driver  in the green transition- such as agriculture- to improve their sustainability in a manageable way
  • Ensure leased assets can benefit from the funding offered to aid in the green transition, such as resources that will be made available through the Just Transition Fund
  • Highlight the need for a balanced, pragmatic approach to measures that will have the greatest impact on our industry, such as provisions on vehicles and batteries
  • Educate on the fact that leasing and automotive rental can assist SMEs and other customers to upgrade their assets to more eco-friendly models, at a minimal additional cost

Download our position paper on the Circular Economy Action Plan