Annex 11. Greening procurement

Background

Public procurement can serve contracting authorities beyond the purely economic act of purchasing: it is a lever for sustainable development. Green public procurement (GPP) is an important tool to achieve environmental goals relating to climate change, resource use and sustainable consumption and production – especially as goods and services represent a sizeable share of public spending.

Green public procurement also makes financial sense, by focusing on full life-cycle costs of a contract and not just the initial price e.g. through energy-efficiency, water-savings, or a reduction in hazardous substances that limits waste disposal related costs.

Resources

The EU website Green Public Procurement - European Commission provides guidance, criteria and assistance for procuring goods, services and works with a reduced environmental impact throughout their life cycle.

The "Buying Green" handbook outlines the possibilities to pursue GPP under the 2014 EC Procurement Directive, which enables public authorities to take environmental considerations into account. This applies during pre-procurement, as part of the procurement process itself, and in the performance of the contract.

A Green Public Procurement Helpdesk is available to promote and disseminate information, and to provide answers to enquiries on green public procurement. The Helpdesk is open to all stakeholders who have questions regarding procurement using EU funds, including to non-EU national institutions. 

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Entry points for greening procurement

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➡️ Identify main environmental impacts

Following the general principle applying to procurement and grants (EU Practical Guide, PRAG), environmental and climate change issues must be taken into account by tenderers, candidates and applicants in the context of procurement and calls for proposals (PRAG 2.5.5. Other essential points). This implies identifying the potential environmental impact of each contract. Please consider:

• The environmental impact of the materials that will be used, and the impact of the production processes (notably, for supply contracts e.g. use of recycled material, avoidance of harmful chemicals, type of packaging).
• Energy and water consumed, waste generated.
• Product durability/lifespan.
• Potential for product recycling or reusing (e.g. batteries in photovoltaic systems may contain heavy metals and therefore be considered hazardous waste, needing special disposal/recycling measures).
• The greenhouse gas emissions and other environmental impacts of transport (including for service contracts, see below example of GHG emissions clause for service contracts).
• The conclusions of an Environmental Impact Assessment when relevant (works contracts).

Tenderers and their personnel must comply with the environmental legislation, including multilateral environmental agreements (PRAG 2.5.6., ethics clause). The contractor should therefore be able to ensure:

• Staff is technically qualified to carry out the contract according to environmental legislation.
• Management procedures are in place to ensure services are provided in line with environmental requirements, ideally certified by an independent body.

➡️ Define green requirements in Terms of Reference or Technical Specifications

According to the PRAG, Terms of Reference (for service contracts) and technical specifications (for supply and works contracts) should specify:

1. 1. environmental and climate performance (e.g. care is taken to ensure that specifications take into consideration the latest developments on the matter);
   2. for purchases intended for use by natural persons, design requirements (including environmental issues, in accordance with the latest developments, e.g. waste), excepted in duly justified cases;
   3. levels of and procedures for conformity assessment, including environmental aspects;
   4. for all contracts, terminology, symbols, testing and test methods, packaging, marking and labelling (including environmental labelling, e.g. on energy consumption), production processes and methods.

Green requirements could therefore include, when relevant:

• Specifics on the nature of the product itself (e.g. electricity which is produced from renewable sources; food produced from organic agriculture; or reusable/repairable/upgradable products).
• Preferences or specifics of the material to be purchased (e.g. use paperboard instead of plastic).
• A minimum percentage of recycled or reused content.
• Details on how the products will be disposed or recycled (e.g. in the case of food catering).
• Restrictions on the use or presence of hazardous substances (e.g. for cleaning services, purchase of furniture, material).
• Details on the environmental ISO standards (or equivalent) used to ensure environmental conformity with national environmental or circular economy regulations.
• Minimum rating of common environmental labels (e.g. appliances, lighting and equipment use an energy efficiency rating from A to G).
• The use of a specific eco-label, whilst ensuring compliance with the conditions established in point 17.6 of Annex I to the EU Financial Regulation^[50].

The EU has defined Green Public Procurement criteria for more than 20 categories of products, services and works, which are regularly reviewed and updated. These notably cover road design, construction and maintenance; computers, monitors, tablets and smartphones; electricity; office building design, construction and management. The criteria include not only selection and award criteria, but also specifications and contract performance clauses which are designed to be inserted directly into tender documents. The criteria also include information on verification methods.

Please note: the Terms of Reference or Technical specifications need to relate to the works, supplies or services being purchased, and not to the general capacities of the contractor.

➡️ Select or exclude tenderers according to criteria that include environmental technical and professional capacity

Apply, where appropriate, selection criteria based on environmental technical capacity or environmental and supply chain management measures. Exclude tenderers who do not comply with applicable environmental regulations.

To validate the operator’s technical and professional capacity, the Contracting Authority may request an indication of the environmental management measures that the economic operator will be able to apply when performing the contract (item 2.i of PRAG basic principles on technical and professional capacity).

Where the contracting authority requires the provision of compliance certificates for environmental management systems or standards, it must refer to the European Union Eco-Management and Audit Scheme (EMAS) or to other recognised environmental management systems^[51].

Where an economic operator has demonstrably no access to such certificates, or no possibility of obtaining them within the relevant time limits for reasons that are not attributable to that economic operator, the contracting authority must also accept other evidence of environmental management measures, provided that the economic operator proves that these measures are equivalent to those required under the applicable environmental management system or standard.

➡️ Define green awarding criteria and performance clauses

Under the best price-quality ratio award system^[52], quality criteria may include elements such as:

• Social, environmental and innovative characteristics.
• Certified procedures minimising the environmental impact of the product or service to be provided.
• Production, provision and trading process and any other specific process at any stage of their life cycle, after- sales service, technical assistance, that can be required to enhance the greening of the purchase.

 A step-by-step approach in using green awarding criteria includes the following steps:

• Lay down minimum levels of environmental requirements. Tenders that do not comply with environmental regulations or below those levels of quality must be rejected.
• Encourage tenderers to propose higher levels of environmental performance through green award criteria. These should be clearly defined in the tender dossier, based on verifiable, justifiable, and ambitious environmental criteria for products and services.
• Adopt a life-cycle approach to estimate costs when comparing tenders. Look beyond the initially announced purchase price and assess associated costs and environmental impacts in the entire life cycle of the contract, including operating costs, electricity and water bills, recycling costs, spares and maintenance.
• Establish a rule to reject tenders with abnormally low costs.

Green awarding criteria should be accompanied with environmental performance clauses at contract level. Such performance clauses may underline the environmental commitments made by contractors, and provide appropriate remedies (e.g. through financial penalties, or other forms of compensation) where they fall short. Ensure there is a system for monitoring these commitments and that they are also applied to subcontractors.

➡️ General environmental considerations for works contracts

Works contracts, particularly for large infrastructure, can have important negative impacts on the environment (destruction of ecosystems, land conversion, pollution, resource use, etc.)  They require robust environmental safeguards, and measures to avoid, minimise, rectify, reduce and offset negative environmental impacts (following the mitigation hierarchy).  If the project was subject to an Environmental Impact Assessment (EIA), the relevant measures from its corresponding Environmental Management Plan (EMP) must be reflected in the contractual documents.

In the case of work contracts and upon their provisional acceptance, the contractor is required to dismantle and remove from the site all its remaining equipment, temporary structures and materials no longer required and any litter or obstructions and restore the site to the conditions specified in the contract^[53].

The obligation of the contractor to leave the site in proper condition is of utmost importance as it carries both cost and environmental consequences. Particular attention should be paid not only to the completed works and its vicinity but also to any quarries, borrow pits, buildings, water sources, etc., which were put at the disposal of the contractor by the contracting authority. The supervisor should ensure that this obligation is enforced.

References

^[50] When requiring a specific label or specific requirements from a label, the following conditions must be satisfied: (a) the label requirements only concern criteria which are linked to the subject matter of the contract and are appropriate to define the characteristics of the purchase; (b) the label requirements are based on objectively verifiable and non-discriminatory criteria; (c) the labels are established in an open and transparent procedure in which all the relevant stakeholders may participate; (d) the labels are accessible to all interested parties; € the label requirements are set by a third party over which the economic operator applying for the label cannot exercise a decisive influence.

^[51] In accordance with Article 45 of Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community Eco-Management and Audit Scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/193/EC or other environmental management standards based on the relevant European Union or international standards by accredited bodies.

^[52] In this case the contracting authority takes into account the price and other quality criteria linked to the subject matter of the contract and apply a weighting formula.

^[53] Article 60(4) of the general conditions.