ERA calls on EU to view rental as ‘flagship model’ in circular economy

The European Rental Association (ERA) offered its input to the European Commission’s Circular Economy Act proposal, calling for more support of business models that increase resource efficiency and sustainability, including the use of rental equipment.

Rental is, by definition, a circular business model, extending the lifespan of products through maintenance, refurbishment, and reuse for multiple users and projects.

By replacing ownership with access, the rental model decreases waste, maximizes resource utilization, and results in the preservation of key raw materials.

ERA highlights that the rental sector does provide social and economic benefits by providing SMEs with sustainable equipment, creating local employment sources, improved safety through professional maintenance and contributing to innovation and digitalisation in the construction and industrial sectors.

In its contribution, ERA urges the European Commission to:

• Recognise equipment rental as a flagship model for circularity within the CEA;
• Ensure favourable tax treatment for circular business models, such as lower VAT and incentives for maintenance and refurbishment;
• Include rental in Green Public Procurement (GPP) criteria for public construction and infrastructure projects;
• Extend the Digital Product Passport (DPP) to non-road mobile machinery (NRMM) for better traceability, reuse, and repair.

ERA thinks the Circular Economy Act can bring circular practices into the mainstream and help make Europe’s economy more sustainable, competitive, and resilient.

The European rental industry generates around €31 billion annually, with more than 18,000 companies employing over 160,000 people.