How manufacturing companies can make the transition to circular production
The European manufacturing industry is facing a major challenge: producing in a more sustainable way while using fewer raw materials, generating less waste and reducing dependence on suppliers outside Europe. Circularity offers an important part of the solution, but for many companies the key question is: where to start? Within the Horizon European research project called DaCapo, research and technology organizations within Europe developed practical methods and digital tools to make that first step easier. TNO developed an Agile Methodology which will be explained in more detail later on.
From a linear to a circular economy
The traditional economy largely operates according to a linear model: raw materials are extracted, processed into products, used, and ultimately discarded. This model is increasingly under pressure, not only because of its environmental and climate impacts, but also because Europe depends on suppliers outside the European Union for many critical raw materials
A circular economy breaks this pattern. Products and materials remain in use for longer through maintenance, repair, reuse, refurbishment and recycling. As a result, the demand for virgin raw materials decreases and companies can reduce their reliance on global supply chains. Circularity therefore contributes not only to sustainability, but also to Europe's strategic autonomy.
Why circularity is challenging in practice
Despite its benefits, the transition to circular production does not happen automatically. Small and medium-sized enterprises (SMEs) in particular face practical questions. What is the financial case for circularity? What investments are required? And how do you determine which approach best fits your business?
In addition, many circular solutions depend on data availability, collaboration across the value chain and new business models. For entrepreneurs who are already focused on production, customers and business continuity, investing time and resources in these areas is not always straightforward.
It was precisely for this reason that the European Commission launched the Horizon Europe project DaCapo. The project brought together fifteen partners from ten European countries to develop practical tools that help companies implement circularity in a tangible and effective way.
Digital tools for circular value chains
The project focuses on developing digital technologies that help companies use raw materials more efficiently and extend product lifecycles. Examples include digital product passports, digital twins and AI-driven decision-support systems. These technologies make it possible to track products throughout their entire lifecycle, gain insight into material flows, and make better-informed decisions regarding maintenance, reuse and recycling.
- Fairphone, which is using battery monitoring and digital product information to extend smartphone lifespans and make devices easier to repair;
- GKN Aerospace, which is applying digital technologies to reduce material waste in manufacturing processes;
- PESMEL, which is using data to improve the maintenance and future readiness of machinery designed to operate for several decades. From knowledge to an agile methodology
Within the project, TNO analysed existing circular business models and developed a practical approach that enables manufacturing companies to define their own pathway towards circularity.
This approach resulted in the Agile Methodology: an interactive, openly available framework that helps companies identify and capture circular opportunities step by step. The methodology was intentionally designed to be flexible. Companies at the beginning of their circularity journey can use it to gain an understanding of the key principles, while organisations with more experience can focus on specific elements of their value chain or production process.
Circular business models
One of the key lessons from DaCapo is that circularity can only succeed when technology, business models and practical experience come together. New digital tools are valuable, but companies must ultimately be able to derive economic value from them as well.
For this reason, TNO devoted significant attention within the project to circular business models. One example is shifting from selling a product to selling the performance that the product delivers. This may involve offering availability, performance or usage as a service. Such models create a direct incentive for manufacturers to extend product lifetimes and use materials more efficiently.
A shared challenge
Although the project will conclude in 2026, its outcomes remain highly relevant. European legislation relating to digital product passports is evolving rapidly, and an increasing number of companies are seeking ways to combine sustainability, resource security and competitiveness.
TNO is therefore continuing to build on the knowledge generated through DaCapo in various follow-up initiatives focusing on digital product passports, circular value chains and sustainable manufacturing. The central question remains the same: how can circularity be made not only technically feasible, but also economically attractive?
DaCapo demonstrates that this transition is achievable when researchers, industry and technology developers work together. By making circularity concrete, data-driven and practical, the project helps lay the foundations for a more sustainable and resilient European manufacturing sector.
Want to learn more?
Explore the Agile Methodology and other results from the DaCapo project and download the full paper (pdf).
Contact us
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Nick Oostervink
Functie:Senior Project Manager-
Standplaats:Den Haag - New Babylon
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Email:Email Nick
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Laura van den Aarssen
Functie:Orchestrator Business Value in Digital EcosystemsAs a Senior Consultant, I support organisations in successfully embedding digital innovation in complex, multi-stakeholder environments. My work focuses on data collaboration, digital ecosystems and emerging regulation, including the Digital Product Passport (DPP).
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Standplaats:Den Haag - New Babylon
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Email:Email Laura
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