The role of public policy in stimulating radical environmental impact reduction in the automotive sector: the need to focus on product-service system innovation

Product-service system (PSS) innovation is a promising approach to address sustainability challenges in the automotive industry. Starting form this assumption, this paper presents and discusses the potential contribution that policy measures can have in fostering the automotive sector in innovating on a PSS level. A set of policy instruments (general instruments and specific PSS-targeted ones) are presented and classified, underlining the effects they could produce at the company and environmental levels. In order to effectively support sustainable PSS diffusion in the automotive industry, the paper suggests the integration of general policy measures (such as internalisation of external costs, extended producer responsibility programmes and informative policies), with the PSS-targeted ones (such as Green Public Procurement focused on sustainable PSS, support of companies in acquiring information related to PSS, support of demonstrative pilot projects). In addition, the paper suggests the necessity to involve actively universities and research centres.