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Green procurement: the key to decarbonize construction and road transport

Current public procurement practices will not put the EU on track to meet its climate goals, even though public spending is widely recognised as a key lever to decarbonise hard-to-abate sectors like road transport and construction, writes Evelin Piirsalu, senior expert at the Stockholm Environment Institute Tallinn Centre.

Evelin Piirsalu / Published on 29 March 2023

This perspective was originally published by EURACTIV on 29 March 2023.

The European Commission has clearly identified Green Public Procurement (GPP) as a strong stimulus for eco-innovation, and the present presidency of the EU Council, Sweden, has prioritised green energy and industry transitions.

new report by SEI, focusing on the climate impact of the construction and road transport sectors, clearly shows that by strengthening GPP practices for these sectors, the EU can significantly cut their climate impact.

But current practices fail to systematically harness GPP’s tremendous potential to accelerate the decarbonization of construction and road transport, our study shows. 

Government purchasing accounts for 15% of global greenhouse gas (GHG) emissions, creating a massive opportunity for authorities to cut their contributions to climate change through more mindful procurement.

GPP is the practice of purchasing goods and services using environmental criteria, with the aim of cutting carbon emissions and mitigating environmental harm throughout the life cycle of the product or service.

In the EU, public spending on works, goods and services amounted to about 15% of its GDP in 2020, making public authorities significant players in the market.

By building environmental standards into public procurement contracts, public purchasing can send strong market signals to companies that rely on governments for business.

Globally, the construction and transport sectors each represent about 12% of government procurements’ GHG emissions and make heavy use of emissions-intensive resources such as steel, cement, asphalt, and energy.

Reforming purchasing in these sectors can go a long way toward shrinking governments’ carbon footprint. Prioritizing these sectors can make the greatest impact towards reducing the public sector’s environmental footprint.

The EU has committed to achieving a 55% reduction in GHG emissions by 2030 compared to 1990 levels. Drastic emissions reductions are needed at an unprecedented speed and scale to achieve this goal.

But, while most of the eight countries studied recognise GPP’s importance in achieving climate goals, very few binding requirements exist to motivate governments to practice it.

To be effective, GPP-related policies and climate targets need greater alignment. And, despite a flourishing list of tools and environmental criteria available throughout the EU, current practices fail to deploy GPP in a focused and consistent manner, and with the scale required to harness its decarbonisation potential. 

At the same time, governments at all levels such as the Netherlands, Catalonia and Berlin serve as beacons of GPP with robust goals and higher ambition, showing how GPP can help mitigate climate change.

The Netherlands is one of the few countries that monitors the effects of GPP and reported that environmentally focused procurement for eight product groups in 2015 and 2016 led to at least 4.9 metric tons of avoided GHG emissions.

Similarly, a 2017 report revealed that the State of Berlin managed to cut its GHG emissions by 47% through GPP in 15 product groups. 

Spain’s Catalonia region set a goal of 50% of procurements using GPP by 2025, an all-electric public vehicle fleet and 100% renewable energy powering public buildings by 2030. 

So, the study – covering Sweden, the Netherlands, France, Germany, Estonia, Poland, Spain, and Italy – shows that the public sector can significantly minimize its environmental impact and mitigate climate change through its purchasing power.

But the full potential is not met. To bolster GPP and scale it to help achieve climate goals, the EU and its Member States need: 

  • Better-coordinated policies,
  • Common metrics for measuring progress and evaluating tenders,
  • Increased resources such as time, funding, and support,
  • Greater collaboration and knowledge exchange among procurers and businesses,
  • Clearer incentives, binding requirements, and enforcement, covering operational and embedded emissions.

These measures would accelerate and harmonise GPP uptake within and across EU Member States and help countries reach their climate goals. 

In mid-March, as part of its Green Deal Industrial Plan, the European Commission adopted the Net Zero Industry Act.

The NZIA would require public authorities to consider sustainability and resilience criteria for net-zero technologies in public procurement or auctions, as well as specifying a weighting system for these criteria when deciding upon procurement.

Although the NZIA does not directly apply to construction products, it is a welcome step on the way to ensuring that near-zero emission construction products, such as green steel and cement, are available in sufficient quantities and at a competitive cost.

To ensure that we reap the rewards from this approach, the EU and Member States also need to systematically strengthen the implementation and enforcement of GPP through the proposed measures in our study, such as the increased capacity to evaluate tenders and setting robust common metrics.

The EU has an important role to play in supporting the implementation of impactful GPP practices. With a concerted and unified movement toward GPP, the EU and its Member States can send strong market signals to the companies that depend on their business, accelerating the decarbonisation process that our planet requires.

SEI author

Evelin Piirsalu

Senior Expert (Green and Circular Economic Transformations Unit)

SEI Tallinn

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