In our previous articles, we explored how capital tied up in equipment can constrain growth, how lifecycle complexity is adding to the overall challenge of managing assets, and how usage-based models are being considered alongside ownership in this evolving context. 

Taken together, these perspectives point to a broader issue: how are businesses approaching investment decisions in an increasingly uncertain environment? 

Across Europe, the data highlights a context where investment is not necessarily slowing, but where committing capital is becoming more complex. 

An environment shaped by uncertainty 

The conditions in which equipment decisions are made have evolved. Faster technology cycles are reducing the lifespan of assets. At the same time, uncertainty around future developments is influencing how organisations approach long-term commitments. 64% of decision-makers say that uncertainty about future technologies is delaying capital expenditure decisions. In this context, investment decisions are made under a combination of pressures — technological, financial and operational. 

Capital constraint as a constant factor 

This uncertainty does not operate in isolation. As highlighted in the Outlook, capital tied up in equipment remains a widespread constraint. With 87% of business leaders reporting that capital lock-up has limited growth at some point, investment decisions are already being made within constrained conditions. This creates a context in which committing capital today may limit flexibility tomorrow. 

As a result, investment is often evaluated not only in terms of cost or return, but also in terms of what it may prevent organisations from doing elsewhere. 

A decision-making tension 

The data points to a recurring tension. On one hand, delaying investment may increase exposure to ageing equipment and slower innovation.  On the other, committing capital too early may increase exposure to obsolescence and reduced flexibility. This does not resolve into a single direction of travel. Instead, the findings suggest that decision-making is becoming more conditional – influenced by timing, asset type and uncertainty around future developments. 

Uncertainty and decision timing 

Beyond technology, the Outlook also points to wider factors influencing decision-making. Economic conditions, cost of capital and broader market uncertainty are all cited as influencing equipment investment decisions. These do not necessarily change the need to invest, but they may affect: 

• the timing of decisions 
• the scale of commitment 
• the level of flexibility required 

This contributes to a more cautious approach, where decisions are reassessed rather than accelerated. 

Ownership remains relevant – but evaluated differently 

Despite these pressures, ownership continues to play an important role. In many cases, it remains associated with control, predictability and long-term use. At the same time, the data suggests that ownership is increasingly assessed in context — taking into account: 

• capital commitment 
• technology risk 
• flexibility over time 

This does not indicate a shift away from ownership, but a more situational evaluation of when it is appropriate.   

Conclusion: investment under constraint 

What emerges from the findings is not a reduction in investment activity, but a change in how it is assessed. Capital constraints, technological uncertainty and operational complexity are combining to make decision-making more conditional. Investment becomes less about a single decision, and more about balancing trade-offs over time. The data therefore points to an environment where businesses continue to invest, but do so within a tighter framework of constraints and uncertainty.

In our next article, we take a closer look at end-of-life management — and why it is increasingly influencing procurement decisions, while remaining a significant operational challenge for many organisations. 

In our previous articles, we explored how capital tie-up and lifecycle management are constraining growth and adding complexity to equipment strategies across Europe. Together, these pressures raise an important question: as ownership becomes more complex, how are businesses approaching alternative models?

Across Europe, the Outlook shows that organisations are adopting usage-based models for part of their equipment. 45% of businesses already access at least a quarter of their equipment through these models. At the same time, the findings suggest a more nuanced picture. Adoption does not appear to be progressing uniformly, and in many cases, remains constrained by a range of factors. Among the most frequently cited barriers preventing greater use are: 

• a preference for ownership 
• lack of supplier options 
• perceived higher cost over time 
• lack of internal understanding of how these models work 
• uncertainty around end-of-contract processes 
• accounting or reporting complexity 
• procurement policy 

Taken together, these factors create friction in wider adoption of usage-based models and help explain why uptake remains uneven.

Leaders recognise the value of usage-based models 

Despite these barriers, the report shows that business leaders clearly recognise the potential of usage-based models: 

• 58% say that greater access to equipment would improve their agility. 
• 50% believe traditional CAPEX models expose them to unnecessary financial risk. 
• 49% say more flexible access would help them respond to sudden shifts in demand 

The findings also suggest that some organisations associate usage-based models with: 

• improved access to newer technologies 
• reduced exposure to obsolescence 
• greater flexibility in uncertain environments 

This points to a broader perception of usage-based models not only as financing alternatives, but as tools that support flexibility and their responsiveness in changing market conditions. 

Ownership still matters but expectations are evolving 

Despite the presence of usage-based models, ownership remains a central component of equipment strategies. In many sectors, it continues to provide: 

• control 
• predictability 
• long-term stability 

At the same time, the data suggests its role is increasingly assessed in context. Rather than a binary choice, businesses are evaluating ownership alongside other options, depending on asset type, lifecycle and strategic priorities. 

Conclusion: a more complex landscape of ownership and usage 

The Outlook findings do not point to a simple shift towards usage-based models. Instead, they highlight a more complex landscape. Usage-based models are present within the data, and their potential benefits are recognised by business leaders. At the same time, adoption remains shaped by a range of practical, structural and ecosystem factors. Overall, the picture is less one of transition and more one of reassessment – where different approaches are considered alongside one another, depending on context. 
  

Frequently asked questions 

In our next article, we bring these insights together to explore a broader question: if ownership and usage both have a role to play, how are businesses finding the right balance between them?

In our previous article, we explored how capital tied-up is constraining growth for European businesses and why ownership decisions are becoming harder to justify in a fast-changing environment. But equipment strategy is not only being reshaped by financial pressures.  

A second, equally significant shift is underway: the increasing complexity of managing equipment beyond acquisition. We tend to think of equipment decisions as a moment in time. A purchase. A contract. A deployment. Increasingly, they are not. 

They are becoming ongoing responsibilities extending beyond acquisition into tracking, compliance, maintenance, and end-of-life coordination. And for many European businesses, this shift is proving difficult to manage in practice.

Our latest research – the European Business Equipment Outlook 2026 – conducted among more than 1,000 decision-makers across 11 European countries, highlights a growing reality: equipment strategy is no longer just about access and financing. It is about managing assets across their full lifecycle and meeting rising expectations along the way.  

For manufacturers, dealers and equipment suppliers, this shift has direct implications. It is already reshaping how your customers evaluate equipment, how procurement decisions are made, and what “value” means in a sales conversation. 

A changing context: lifecycle expectations are rising 

The environment in which businesses operate has changed significantly. Alongside economic pressures, such as interest rates, cost-of-capital constraints, and supply chain volatility, organisations are facing growing regulatory and reporting requirements. Frameworks such as CSRD, SFDR and the Circular Economy Act are increasing expectations around transparency, traceability and asset management over time. As a result, equipment decisions are no longer judged solely on performance or price. They are increasingly assessed on how assets are: 

• tracked throughout their lifecycle 
• maintained and optimised 
• redeployed, refurbished or recycled 
• documented for compliance and reporting purposes 

What was once a downstream operational concern is now moving upstream into procurement and investment decisions.

Lifecycle management is already influencing procurement decisions 

This shift is not theoretical. It is already shaping behaviour. 68% of European business leaders say that the ease of managing refurbishment, reuse, recycling or disposal influences their equipment purchasing decisions. In other words, lifecycle considerations are no longer secondary. They are becoming part of the initial decision-making criteria. But this growing importance is not matched by operational readiness. 

Nearly nine in ten organisations (87%) say that managing the end-of-life of owned equipment is challenging. This reveals a fundamental gap. Businesses increasingly understand what is required of them. But many do not yet have the capabilities, processes or visibility to deliver on those expectations. 

A structural gap between ambition and execution 

This gap is not simply a matter of intent or awareness. It is structural. Traditional ownership models were designed predominantly around acquisition and depreciation. They were not built to provide full lifecycle visibility, tracking, or coordination across multiple stakeholders. As lifecycle accountability becomes more complex, this limitation is becoming more apparent. Organisations are being asked to: 

• monitor assets more closely 
• report on asset lifecycle impact 
• ensure responsible end-of-life outcomes 

Yet the tools, processes and ecosystems required to manage these responsibilities at scale are still evolving. This explains why lifecycle management is simultaneously a strategic priority and an operational challenge.

Where financing fits and where it does not 

It is tempting to view financing models as the primary lever for improving lifecycle outcomes. They can play a role. In certain contexts, solutions that incorporate structured return mechanisms may facilitate: 

• asset redeployment 
• refurbishment 
• improved lifecycle visibility 

But financing alone does not determine lifecycle performance. Outcomes also depend on: 

• product design 
• maintenance practices 
• supply chain coordination 
• the ability to track and manage assets over time 

This is an important distinction. Lifecycle strategy is not purely a financial question. It is an operational and ecosystem question as well. 

Ownership still matters but the criteria are evolving 

Despite these changes, ownership remains important. Across many sectors, it continues to offer: 

• control 
• predictability 
• and long-term availability 

But it is no longer evaluated in isolation. The question is no longer simply whether ownership is important. It is how it fits within a broader strategy that includes lifecycle management, flexibility and compliance. 

Conclusion: from equipment strategy to lifecycle strategy 

What is emerging is a broader transformation. Equipment strategy is becoming lifecycle strategy. What was once a discrete transaction is now part of a continuous process, one that spans acquisition, use, optimisation, and end-of-life. For businesses, this increases complexity. For OEMs and equipment suppliers, it changes the nature of value. The competitive question is no longer only:  what equipment do you sell? It is increasingly: how does that equipment perform, evolve, and get managed over time? 

Frequently asked questions 

In our next article, we will explore how businesses are responding to these pressures by rethinking the balance between ownership and access – and what is really driving the adoption of usage-based models across Europe. 

Equipment is still widely treated as an investment – but for many businesses, it has become a source of capital lock‑up. That is exactly what our European Business Equipment Outlook 2026 reveals. Based on insights from more than 1,000 decision‑makers across 11 European countries, the report shows that for most businesses, capital locked into physical equipment is now actively constraining business growth. 

For manufacturers and their distribution partners, these findings matter. They explain why customer conversations are getting harder, why deals stall later in the cycle, and why the question of how equipment is acquired is increasingly shaping whether it gets acquired at all. What follows is a read of your customers’ world – and what it signals for how you go to market. 

A context that makes things worse 

To understand why capital lock‑up has become such a pressing issue, we first need to look at the environment businesses are operating in. According to our survey, 95% of respondents say their equipment becomes obsolete faster than it did five years ago. The impact is significant: 43% say their equipment sometimes becomes obsolete before delivering the expected return on investment.

In this context, committing to heavy upfront investment is increasingly risky. This is where capital lock‑up becomes a central challenge, as businesses continue to tie up capital in assets that lose value faster than anticipated.

When equipment ownership constrains business growth 

The numbers speak for themselves: 87% of business leaders say that capital lock-up in equipment has, at some point, limited their company’s growth opportunities. Only 13% say they have never experienced this problem. 

This is not a marginal phenomenon. It is the norm. And for 35% of respondents, this constraint occurs frequently or very frequently – not occasionally, but on a recurring basis. 

Geographic variations underline the scale of the issue: the Netherlands records the highest proportion of frequent constraints (45%), followed by Spain (38%). But no market is spared. In equipment-intensive sectors such as healthcare, transport and logistics, or agriculture, this phenomenon is cited as particularly significant. 

Where buyers would deploy capital if it were freed up  

What the numbers don’t say directly is what this blocked capital actually represents in practice. When asked what they would do if it were freed up, business leaders are clear: they would invest in areas that define future competitiveness. 

33% would prioritise sustainability and green technology initiatives. 32% would focus on expanding into new markets. The same proportion would invest in digital transformation or technology upgrades. 31% would direct that capital towards innovation and R&D. 

What stands out in these responses is their diversity. Business leaders are not looking for a single alternative: they are looking for the freedom to rebalance their investments according to their strategic priorities at any given moment. And that is precisely the freedom that capital lock-up takes away from them. 

Technology uncertainty adds another layer of complexity 

On top of these constraints, comes another: 64% of decision-makers say that uncertainty around future technologies is delaying their equipment investment decisions. Investing now means risking obsolescence. Waiting means risking a loss of competitiveness. A difficult dilemma to resolve when capital is already under pressure. 

This creates a form of partial paralysis: businesses know they need to invest, but hesitate over when and in what, which, paradoxically, extends the lifespan of ageing equipment and compounds the obsolescence problem further. 

Ownership still dominates equipment financing – but perspectives are shifting 

Despite these pressures, asset ownership remains dominant: 41% of businesses primarily acquire equipment through outright purchase. This is not surprising. Ownership offers control, stability, and continues to be seen as fundamental across many sectors. But what is changing is how business leaders evaluate it. The question is no longer “Should we own?”, it has become “In which cases is the capital tied up in ownership still worth the cost?” A subtle shift in perspective, but a significant one. 

Frequently asked questions 

In our next article, we explore another major challenge identified by European decision-makers: the growing complexity of equipment lifecycle management and why it is reshaping procurement criteria for European businesses.

BNP Paribas Leasing Solutions is committed to unlocking the transition towards a circular economy. We’re collaborating with partners and clients to develop innovative solutions that maximise efficiency, minimise waste, and enable sustainable growth. 

A prime example is our strategic Joint Venture, BNP Paribas 3 Step IT, delivering a comprehensive solution that covers the entire technology lifecycle – from procurement and asset management to responsible decommissioning – ensuring business devices are securely refurbished for their next use. 

In this exclusive interview, our Chief Sustainability Officer, Andrey Maramzine, shares insights on how forward-thinking organisations are revolutionising their approach to technology management to drive greater value while reducing environmental impact. 

Interviewer: How would you characterise technology’s role in today’s organisational landscape? 

Andrey: Technology has become the backbone of organisational agility and competitiveness. While digital needs vary significantly across industries and businesses, technology universally enhances efficiency, productivity, and connectivity. It will undoubtedly remain instrumental in helping organisations achieve sustainable growth and strategic objectives in the years ahead. 

Interviewer: What critical challenges do organisations face in managing their technology assets? 

Andrey: Today’s technology management occurs against a backdrop of urgent challenges: climate crisis, resource constraints, complex global supply chains, evolving cybersecurity threats, and regulatory requirements. 

These factors significantly impact an organisation’s operational resilience and ability to meet stakeholder expectations, making them essential considerations in any technology strategy. 

Interviewer: How does BNP Paribas 3 Step IT help customers navigate these complex challenges? 

Andrey: We’ve developed a comprehensive circular solution that guides customers through the entire technology journey – procurement, asset management, decommissioning, and replacement – within a single integrated service. 

Our Technology Lifecycle Management approach represents a shift in IT asset handling. Through our all-inclusive service contracts, organisations access cutting-edge equipment, manage assets efficiently via our platform, and ensure devices are securely and sustainably refurbished when no longer needed, before being remarketed. 

Interviewer: What compelling reasons should motivate businesses to embrace circular technology management? 

Andrey: The standout advantage is proactive risk management from day one. Organisations immediately address critical concerns – data security, financial optimisation, regulatory compliance, and environmental impact – through a unified solution. 

Our clients recognise that technology investments must deliver strong returns while meeting heightened responsibility standards. Technology Lifecycle Management delivers this balanced approach, combining operational excellence, financial efficiency, enhanced security, and environmental sustainability without compromise. 

Interviewer: Thank you for sharing these insights into solutions making meaningful differences for organisations and transforming technology management practices. 

Andrey: Thank you for the opportunity to discuss these important developments. 

Download our comprehensive whitepaper, ‘The Circular Opportunity: Harnessing the Power of Product-as-a-Service’.

By sharing these perspectives, we aim to champion sustainable growth solutions and progress meaningful conversations with our partners and clients on opportunities presented by the circular economy transition. 

As the global population continues to expand, the construction industry plays a crucial role in meeting the rising demand for housing, infrastructure, and commercial spaces. However, this growth comes with significant challenges, including labor shortages, increasing material costs, and supply chain disruptions. At the same time, sustainability is becoming an urgent concern, as the construction sector accounts for 37% of global emissions and over a third of all waste generated in the EU. 

In our latest report, The Circular Opportunity: Harnessing the Power of Product-as-Service, we explore how the construction industry is shifting toward circular business models to address these challenges. One such model, Product-as-a-Service (PaaS), presents a transformative opportunity for the sector by offering an innovative approach to equipment ownership, resource management, and sustainability. 

Innovations Driving a Sustainable Industry 

Modern, sustainable construction equipment is key to overcoming industry challenges. Technologies such as Machine Learning and Artificial Intelligence are enhancing efficiency and safety, while telematics enables data-driven performance management and remote operations. Additionally, the electrification of construction machinery is helping businesses reduce their environmental impact and comply with evolving regulations, such as diesel bans in certain urban areas. 

A New Approach to Equipment Financing 

Investing in construction equipment requires significant capital, which can be a major barrier to growth. High upfront costs can slow investment decisions, while the long lifespan of machinery impacts sales and revenue for manufacturers. 

The PaaS model addresses these issues by allowing businesses to access construction equipment through planned monthly payments, rather than outright purchase. This model provides customers with essential equipment and support services, such as maintenance, repairs, and data diagnostics, without the financial burden of ownership. 

For manufacturers, this transition from one-time sales to lifecycle services enhances customer relationships, accelerates the sales process, and improves profit margins. By integrating PaaS into their business strategies, manufacturers can create more predictable revenue streams while meeting the evolving needs of their clients. 

Extending the Life of Construction Equipment 

The production of new construction materials is both costly and resource-intensive. Supply chain disruptions and raw material shortages further complicate the process. By adopting a circular model like PaaS, manufacturers can reclaim and repurpose valuable materials, extending the life cycle of their products. 

Under PaaS, customers utilize equipment without the responsibility of ownership, while manufacturers retain control over their products’ entire life cycle. At the end of its use, equipment can be refurbished, resold on secondary markets, or responsibly recycled. This approach helps manufacturers mitigate supply chain risks, reduce waste, and support sustainability goals. 

Building a More Sustainable Future 

As the construction industry continues to evolve, adopting circular solutions such as PaaS can drive both economic and environmental benefits. This model supports Extended Producer Responsibility (EPR) commitments by maximizing product utilization and encouraging durable, sustainable design. 

At BNP Paribas Leasing Solutions, we are committed to facilitating this transition. Through innovative financing programs for used construction equipment, including warranties and maintenance contracts, we are helping our partners build a more sustainable future. While progress has been made, many solutions that will drive the circular transition are yet to be developed. We remain dedicated to working with industry partners to explore new opportunities for growth and sustainability. 

To learn more about how we can support your business in achieving sustainability goals, contact us today. 

For more insights into how PaaS is revolutionizing construction, download our full report. 

The healthcare landscape is undergoing a significant transformation, driven by the need to innovate in the face of mounting challenges. An aging population, a critical shortage of healthcare workers, and persistent budgetary constraints are forcing the sector to seek novel solutions. Amidst this pressure, circular service models, particularly Product-as-a-Service (PaaS), are emerging as powerful drivers of change. 

A New Model for Healthcare Procurement 

The traditional model of healthcare procurement, characterised by upfront capital expenditure for medical equipment, is proving increasingly unsustainable. PaaS offers a compelling alternative, allowing healthcare providers to access cutting-edge technology without the burden of hefty initial investments. Instead, they enter service contracts that encompass equipment usage, maintenance, and operational support. This shift allows for more predictable budgeting, as costs are aligned with actual usage through models like pay-per-scan for MRI machines. 

Beyond financial benefits, PaaS fosters greater efficiency and optimises resource allocation. Asset management software, often integrated into these contracts, ensures equipment is deployed where it’s needed most and maintained proactively. This minimises downtime, extends equipment lifespan, and prevents waste from underutilisation, all crucial factors in a resource-constrained environment. 

The adoption of advanced technologies like robotics and artificial intelligence further underscores the need for flexible procurement models. While these technologies promise to enhance patient outcomes and alleviate staff shortages, their implementation often requires substantial upfront investment. PaaS provides a pathway to access these innovations, enabling healthcare providers to leverage their benefits without straining budgets.  

A Win-Win for Medical Manufacturers 

Medical equipment manufacturers also stand to gain from the transition to PaaS. By shifting from one-time sales to long-term service contracts, they can establish recurring revenue streams and strengthen customer relationships. The ongoing nature of PaaS contracts allows for continuous engagement, facilitating product upgrades, maintenance, and data-driven insights that improve future iterations. 

Furthermore, PaaS aligns with the growing emphasis on sustainability. By incorporating maintenance, repair, and end-of-life services into their offerings, manufacturers can extend the lifespan of their products, reduce waste, and minimise their environmental footprint. Refurbishment and resale programs, facilitated by PaaS, enable the recovery of valuable materials and resources, contributing to a circular economy. 

The Future of Product-as-a-Service in Healthcare 

The adoption of PaaS models is not merely a financial strategy; it represents a fundamental shift towards a more sustainable and efficient healthcare ecosystem. By promoting responsible resource management and fostering innovation, PaaS empowers healthcare providers to deliver better patient care while minimising their environmental impact. As the healthcare sector continues to evolve, circular service models will play an increasingly vital role in shaping its future. 

For more insights into how PaaS is revolutionizing healthcare, download our full report. 

This article first appeared on ‘Envirotec’ here

Businesses across Europe are facing mounting pressure to invest in more eco-friendly practices, but high upfront costs and operational challenges stand in the way. Neil Pein, CEO at BNP Paribas Leasing Solutions, explains how embracing Product-as-a-Service (PaaS) models can improve accessibility to green technology, support the circular economy and help organisations meet evolving regulatory requirements. 

The EU’s renewable energy target of 42.5% by 2030 is forcing organisations across all industries to rethink their business models. New regulations such as low emission zones, energy efficiency mandates and reporting requirements like the EU’s Corporate Sustainability Reporting Directive are turning up the heat for businesses to adopt more sustainable practices. While these policies present challenges, they also offer a huge opportunity for firms to invest in green technology.  

Fortunately, the green technology sector is rife with innovative solutions that are ready to support companies on this journey. From EV charging points to solar panels and LED lighting, green technologies are developing rapidly and will be central to helping organisations reduce their carbon emissions.  

So, what’s the catch? While the grass may be greener when it comes to leveraging certain technology, the challenge for businesses lies in the hefty gardener’s bill that comes with it. Big upfront costs remain one of the major barriers to investing in green technology. A rooftop solar energy system or an EV charger can cost thousands – if not tens of thousands – of euros upfront, with additional outlays for installation and maintenance. For businesses operating on tight margins and economic uncertainty, these costs can deter much-needed investment. 

As a result, businesses find themselves between a rock and a hard place. Regulatory requirements are pushing them to adopt more eco-friendly practices, but the financial burden of doing so is slowing down the pace of progress. 

A new route to sustainable profitability  

Investing in green technology and managing costs don’t have to be mutually exclusive. Product-as-a-Service (PaaS) business models offer a game-changing way to access green technology by shifting the focus from ownership to usage or business outcomes.  

Under a PaaS model, companies pay for the service or outcomes provided by a product, rather than owning the asset itself. This means predictable monthly payments replace large initial capital outlays. Additional services such as maintenance, upgrades, and insurance are often bundled into the contract, reducing operational complexity and ensuring optimal performance throughout the product’s lifecycle. 

Take the example of an EV charging station. Businesses pay for the electricity they consume, whilst the Charging Point Operator (CPO) is responsible for installation, maintenance and upgrades.  

This service-focused model provides the flexibility businesses need in today’s unpredictable environment. Companies can scale their usage of green technologies in line with business growth and adjust contracts to match evolving needs without the burden of capital-intensive purchases and big upfront investments. CPOs can offer membership plans and charging credits, catering to individual needs through integrated services. 

A win-win for all parties involved 

PaaS models also make economic sense for manufacturers of green technology products. By retaining responsibility for their products, manufacturers benefit from recurring revenue streams through ongoing service contracts rather than one-time sales, providing them with predictable cash flow. It also incentivises the design of more durable, repairable and recyclable technology, which in turn supports the circular economy. 

Manufacturers are ideally positioned to implement PaaS models, as they have deep product knowledge, control over product development, access to detailed operational data, and the ability to scale solutions. Those leading the transition towards service-based business models are offering significant value to customers and differentiating their brand in a competitive marketplace. 

A collaborative path to sustainability 

Collaboration is key to fulfilling the promise of PaaS across the green technology sector. Markets for products like solar panels and EV chargers are characterised by a complex and fragmented ecosystem with various interdependencies between different stakeholders. For example, most solar panel manufacturers are largely based outside of the EU, while smaller regional players handle installations for residential and small to medium commercial needs. 

Fragmentation in the market can make PaaS adoption more challenging as these circular models rely on a whole ecosystem approach. While the industry has seen some consolidation, with major players acquiring smaller companies or forming partnerships, more collaboration is needed to ensure these circular business models are viable and attractive to end-users. 

Regulatory pressures and corporate sustainability goals are driving demand for more greener solutions, yet traditional ownership models are no longer fit for this transition. By shifting the focus from ownership to usage or outcome-based services, PaaS opens the door for businesses to embrace green technologies without the burden of upfront costs, helping them stay on the right side of compliance in the process.  

For more insights into how PaaS is revolutionizing green tech, download our full report. 

As businesses and governments around the world grapple with the realities of climate change, the adoption of green technologies has become a critical priority. From renewable energy solutions to sustainable mobility, these technologies offer viable paths toward achieving net-zero goals. However, a significant challenge lies in the financial and operational barriers to adopting these solutions on a broad scale. This is where Product-as-a-Service (PaaS) models come into play, offering an innovative approach to procurement and management that aligns well with the principles of sustainability. 

What Is PaaS? 

PaaS shifts the traditional ownership model of goods and services toward a service-oriented framework. Instead of purchasing green technology assets outright, users pay for the benefits they derive from these assets. For example, a company needing solar panels might enter a PaaS agreement, paying a monthly fee for energy produced while the manufacturer retains responsibility for maintenance, upgrades, and eventual recycling. 

This model is inherently circular, promoting product lifecycle management over single-use consumption. It reduces waste, encourages efficient resource use, and ensures that products are designed with end-of-life recovery in mind. 

Accelerating sustainable mobility 

The transportation sector is undergoing a transformation, driven by stricter emissions regulations, electrification targets, and rising demand for clean mobility solutions. The European Union’s target of 30 million zero-emission cars by 2030 underscores the urgency. 

PaaS is playing a pivotal role in easing this transition. For businesses, PaaS models consolidate costs for electric vehicles (EVs), batteries, and charging infrastructure into a single, manageable contract. Manufacturers, energy providers, and financial institutions collaborate to deliver a comprehensive service package, covering installation, maintenance, and upgrades. 

Innovations such as Battery-as-a-Service (BaaS), solar-powered chargers, and Vehicle-to-Grid (V2G) technology align naturally with PaaS. By reducing upfront costs and bundling services, PaaS makes sustainable mobility more accessible for businesses and consumers alike. 

Promoting renewable energy 

Renewable energy adoption is central to achieving climate goals, yet high upfront costs often deter investment. PaaS models address this by offering predictable monthly payments, making solutions like solar panels, heat pumps, and LED lighting more financially accessible. 

For example, Solar-as-a-Service agreements, often structured as Power Purchase Agreements (PPAs), allow customers to pay for electricity generated by solar panels without owning or maintaining the system. Similarly, Lighting-as-a-Service contracts bundle maintenance, monitoring, and upgrades into a single service, reducing costs and improving efficiency for users. 

Benefits for Green Tech Manufacturers 

For manufacturers, PaaS offers financial stability through recurring revenue streams and deeper customer engagement. By retaining product responsibility, manufacturers can reclaim valuable materials at the end of the asset’s lifecycle, mitigating supply chain disruptions and raw material shortages. Bundled services like maintenance and data analytics create additional touchpoints, enhancing customer loyalty and satisfaction. 

Moreover, PaaS supports manufacturers in meeting regulatory demands for sustainable design and recycling, while reducing their environmental footprint. 

The Path ahead 

As the green tech sector continues to evolve, PaaS models are emerging as a vital enabler of sustainable development. They offer an innovative approach to overcoming financial, operational, and environmental barriers, accelerating the adoption of green technologies. 

By aligning economic incentives with sustainability goals, PaaS represents a win-win model for both manufacturers and end-users, paving the way for a greener, more sustainable future. 

For more insights into how PaaS is revolutionizing green tech, download our full report. 

This article first appeared on ‘Sustainability News’ here

With second-hand marketplaces rising and sustainability regulations tightening, businesses are rethinking their approach to technology procurement. Neil Pein, CEO of BNP Paribas Leasing Solutions, explores how Product-as-a-Service (PaaS) offers a long-term solution to e-waste, affordability, and global shortages – bringing in a new era of circular IT strategies. 

Second-hand marketplaces are booming, with cost and sustainability-conscious consumers flocking to websites and apps for electronics, clothes, homeware, and beauty products. Vinted, traditionally known for second-hand fashion, has recently launched its first dedicated electronics category, attracting customers with pre-loved smartphones, wearable tech, and audio devices.  

This shift extends beyond consumers – businesses, too, are rethinking how they manage, procure, and use technology, particularly as part of a wider push towards reducing e-waste and promoting circular economy practices. 

The IT industry has long been a champion for ‘as-a-service’ models, particularly for areas like cloud computing, software, and infrastructure. But now this model is also emerging as an efficient and sustainable alternative to the traditional ownership model. It’s grounded in an understanding of product lifecycles, offering assets to clients through usage or performance-based contracts instead of outright ownership – aligning IT procurement with sustainability goals, while improving cost efficiency.  

(E-)waste not, want not 

E-waste is one of the biggest causes of environmental harm. A record 62 million tonnes of e-waste was produced in 2022 – up 82% from 2010. By 2030, this is projected to rise to 82 million tonnes. Many of these discarded electronic goods end up in landfill, leaking hazardous materials which seep into soil, air, and water, causing serious environmental damages and health risks. 

A wave of sustainability regulations sweeping across Europe means that more and more businesses are turning to PaaS models to stay both compliant and competitive. Many IT businesses have begun setting ambitious targets to incorporate recycled components into new products and reduce their carbon footprints. Apple has tapped into the ‘recycle, reuse, replace’ attitude, pledging to include 100% recycled cobalt in its batteries by 2025.  

To achieve these targets and cut down e-waste, firms must consider how they can set up closed loop systems that allow customers to return used devices and recycle their components. This requires a shift from outright ownership to an IT procurement model where IT devices are acquired on a contract basis. Here, devices are procured, used, and then recovered for refurbishment and reuse – rather than going straight to landfill after their first lifecycle. Device refurbishment is an integral part of the service, ensuring businesses have a plan to measurably reduce emissions and waste that is built into their IT strategy. 

The hidden costs of new technology production 

The environmental costs of manufacturing new technology can often be overlooked – with its true impact slipping through the gaps somewhat unnoticed. For instance, data centres and electronic production are hugely resource-intensive, consuming vast swathes of energy and water. Annually, a 1-megawatt data centre can use the equivalent of the daily water consumption of around 300,000 people for cooling. Semiconductor manufacturing also has a huge water footprint, with the average chip manufacturing facility consuming 10 million gallons of ultrapure water every day.  

PaaS presents a more long-term solution to these challenges given it supports product lifecycle extension and enhanced device utilisation.  

Part of this includes designing new technology with its end-of-life in mind from the get-go – such as using modular components that allow for easier disassembly, repair, and recycling. This allows them to offer more affordable options to customers, while minimising environmental impact.   

For the cost-conscious buyers 

Embracing circular economy practices in the IT sector also makes financial sense. In Europe, the demand for refurbished smartphones is growing, expected to reach more than 431 million units by 2027 – as consumers seek modern technology more cheaply and sustainability. In the business world, PaaS models allow businesses to tailor their IT procurement strategies to match the needs of their workforce, without incurring high upfront costs. Value-add services, such as maintenance and support, help reduce overall IT expenditure while mitigating compliance, security, and sustainability risks.  

Alongside being costly and environmentally intensive, manufacturing new products is also becoming much more complex for businesses as they grapple with complex supply chains and access to raw materials.  

The global semiconductor chip shortage, kicked off in 2020 by the COVID-19 pandemic, caused knock-on supply issues which continued for more than three years. This brought the need for alternative sourcing strategies under the spotlight, particularly where resources are finite and susceptible to disruption. PaaS models offer a viable solution to ensure that the lights can stay on, while reducing the dependence on volatile supply chains.  

Striving for sustainability and cost efficiency has pushed PaaS models in IT to the forefront. As well as circular end-of-life handling for unwanted devices, PaaS solutions also offer more efficient in-life handling, like proactive maintenance services, to extend product longevity and reduce unnecessary waste. Embedding circularity into IT procurement strategies can play an important role in helping businesses to cut their environmental impact – enabling them to not just stay on the right side of compliance, but drive a more sustainable future.