50% green procurement by 2010
According to research carried out for the European Commission, only seven EU countries currently manage a large amount of Green Public Procurement (GPP). These are the 'Green 7': namely Austria, Denmark, Finland, Germany, Netherlands, Sweden and the UK. Other EU countries lag way behind and sometimes do not practise any GPP at all.
A communication presented by the Commission in July 2008 calls on governments to make sure that half of all their tendering procedures comply with a set of common green criteria by 2010.
The proposed 50% target would be indicative only. It received the endorsement of EU competitiveness, industry and energy ministers in September. But they also stressed that member states should remain free to set their own sectoral targets and to adopt more ambitious environmental criteria should they so desire.
Moreover, they called on the EU executive to develop a methodology to evaluate progress made by EU states by 2010 and beyond.
Hurdles to be overcome
According to the study, a number of barriers are preventing more widespread take-up of green public procurement across Europe, including:
A perception that green products are more expensive and a lack of awareness of the benefits;
lack of knowledge about how to develop green criteria, lack of information on the practical tools for GPP, and lack of training for officers dealing with these public purchases;
lack of targets and of political and managerial support;
lack of harmonised GPP procedures and criteria across the EU, which also results in increased administrative costs for businesses and hinders the internal market.
The Commission communication aims to address these obstacles by setting common GPP criteria and giving legal and operational guidance, as well as providing information on products' lifecycle costs. The 50% target is also intended to raise political support for GPP.
The Commission wants to develop common criteria to help avert distortions of the single market and reduce the administrative burden for economic operators and for public administrations implementing GPP. The criteria would be formulated as minimum technical specifications with which all bids must comply.
They would be based on consultations with industry and civil society as well as on existing European and national standards such as the eco-label criteria (a voluntary scheme to encourage businesses to market products and services that are kinder to the environment by awarding them a logo that allows consumers to easily identify them), the Energy Labelling Directive or the Eco-design Directive. The latter sets binding labelling rules for energy-using products only, but the Commission wants to expand it to include non energy-using items like clothing and footwear, furniture, cleaning products, windows, doors, insulation materials, irrigation equipment, concrete products and plasterboard.
The idea would then be to establish a labelling standard below which public authorities would not be allowed to procure.
Ten priority sectors
The draft law also identifies ten priority sectors for the introduction of green public procurement on the basis of their importance in terms of the scope for environmental improvement, public expenditure, potential impact on the supply side, existence of relevant and easy-to-use criteria, market availability and economic efficiency. These are: construction, food and catering services, transport and transport services, energy, office machinery and computers, clothing, uniforms and other textiles, paper and printing services, furniture, cleaning products and services and health sector equipment.
Clean vehicle procurement plans
In September 2007, the Commission had already proposed legislation to make it mandatory for government authorities to ensure their public transport fleets and other utility vehicles, such as buses, rubbish collection lorries or delivery vans, are clean and energy efficient. Under the plans, public authorities will be obliged to take into account lifecycle costs relating to fuel consumption, CO2 emissions and air pollution when acquiring any kind of road vehicle after 2012.
A similar proposal, tabled by the EU executive back in 2005, was thrown out by the European Parliament for being too weak. It had proposed that just 25% of heavy-duty vehicles (weighing over 3.5 tonnes) purchased or leased by public bodies meet an EU "enhanced environmentally friendly" standard.
The Commission says the new plans will affect the purchases of roughly 110,000 passenger cars, 110,000 light commercial vehicles, 35,000 lorries and 17,000 buses. It further estimates that the inclusion of lifetime costs for fuel, CO2, NOx, non-methane hydrocarbons and particulate matter (PM) would, for example, push the overall price of a normal bus up from around €150,000 to €594,030 – making it more worthwhile to pay a higher price upfront for a cleaner and more fuel-efficient vehicle with lower fuel energy consumption and emissions.
However, MEPs are already pushing for costs related to CO2 emissions to be factored in at a price of at least €30 per tonne, rather than the €20 per tonne proposed by the Commission (EurActiv 20/12/07).
They also want the green criteria to enter into force as early as January 2010, and say these should also apply when public authorities purchase replacement parts or engines for retrofitting older vehicles. On the other hand, they say second-hand vehicles, emergency vehicles and those used to provide "operational support" or maintain infrastructure should be exempted from the provisions.
Kick-starting new markets
Because 'green goods' are relatively new on the market, they do not enjoy economies of scale. It is hoped that the pull of public procurement will increase demand sufficiently to allow them to expand and lower their unit costs, helping technologies that are currently not commercially viable, such as biofuels, hydrogen, natural gas or LPG, electric or hybrid vehicles to move into mainstream markets.
In turn, it is hoped that faster adoption of resource-saving products across the economy will help to reduce energy consumption and energy imports, while boosting the EU industry's ability to compete in global environmental product markets.