Green public procurement - the shift from advocating to mandating
The shift towards mandating green public procurement (GPP) in Ireland has advanced with the publication of the Climate Action Plan 2021 on 5 November 2021. Building upon the actions already identified in the Climate Action Plan 2019, the 2021 Plan contains additional commitments on GPP. The key public procurement action identified in the Climate Action Plan 2019 is reiterated in the 2021 Plan i.e.
"Mandate the inclusion of green criteria in procurements using public funds, introducing requirements on a phased basis and provide support to procurers as required" (Action 148 in the 2019 Plan and Action 59 in the 2021 Plan)
The 2021 Plan outlines three further commitments to bolster the GPP agenda i.e. (i) the Office of Government Procurement will update all procurement frameworks, in line with green procurement practice by 2023; (ii) food procurement policies for the public sector will be reviewed with the aim of introducing procurement of nutritious locally-sourced food; and (iii) the purchase of zero-emission electric vehicles will be mandated where available and operationally feasible by end of 2022.
Green public procurement guidance
Guidance on how to implement GPP has been updated with the publication of the EPA's Green Public Procurement Guidance for the Public Sector (2nd edition, September 2021). This guide provides comprehensive and practical guidance for all public purchasers on how to effectively implement GPP. In addition to a general overview of green procurement at all stages of a procurement (from assessing needs to contract performance), the guide provides sample technical specifications, technical capability criteria and award criteria for ten sectors including ICT products and services, paper products and printing services and design, construction and management of office buildings.
Green toolkit in the Procurement Directives
The Public Procurement Directive (Directive 2014/24) and the Utilities Directive (Directive 2014/25/EU) provide a toolkit for public purchasers to incorporate green considerations into their procurements. Under the Directives, it is permissible for technical specifications which define the characteristics of the works, supplies or services to include environmental and climate performance levels. Eco-labels can be used to define technical requirements provided that those requirements are linked to the subject matter of the contract. Tenderers can be excluded from a procurement process where it can be demonstrated by appropriate means that the tenderer has violated applicable environmental law obligations in the performance of a public contract. Award criteria may include environmental characteristics linked to the subject matter of the contract. Life cycle costing must, where relevant, apply to costs imputed to environmental externalities during the life cycle of the works, supplies or services, provided their monetary value can be determined and verified. If it is established that a tender is priced abnormally low because the tender does not comply with applicable obligations in the fields of environmental, social or labour law, the tender must be rejected. A public purchaser has a choice not to award a contract to a tenderer that has submitted the most economically advantageous tenderer where it is established that the tender does not comply with applicable obligations in the fields of environmental, social or labour law.
Related and proportionate requirements
A key consideration for any public purchaser is whether incorporating green considerations in selection and award criteria, technical specifications, requirements and contract conditions is related and proportionate to the subject matter of the contract. The case law of the Court of Justice of the European Union has clarified that there is no requirement for criteria to relate to the "intrinsic characteristics of a product"(Commission v. Netherlands Case C-368/10). This is reflected in Recital 97 of the Public Procurement Directive (Directive 2014/24) which states that:
"…with a view to the better integration of social and environmental considerations in the procurement procedures, contracting authorities should be allowed to use award criteria or contract performance conditions relating to the works, supplies or services to be provided under the public contract in any respect and at any stage of their life cycles from extraction of raw materials for the product to the stage of disposal of the product, including factors involved in the specific process of production, provision or trading and its conditions of those works, supplies or services or a specific process during a later stage of their life cycle, even where such factors do not form part of their material substance. Criteria and conditions referring to such a production or provision process are for example that the manufacturing of the purchased products did not involve toxic chemicals, or that the purchased services are provided using energy-efficient machines... Contract performance conditions pertaining to environmental considerations might include, for example, the delivery, package and disposal of products, and in respect of works and services contracts, waste minimization or resource efficiency…"
The scope for implementing GPP is clearly broad. However, until recently, GPP has had a limited impact in Ireland due to the voluntary nature of the policy, lack of capability, training and accountability in public sector organisations. This is changing particularly with the implementation of the reporting and planning obligations contained in Circular 20/2019: Promoting the use of Environmental and Social Considerations in Public Procurement. The circular requires public bodies to state in their Corporate Procurement Plans how they intend to incorporate green considerations into their procurements and to detail in their Annual Reports (from 2020 onwards) the number and value of contracts which have incorporated GPP. There has also be a significant roll-out of training across the public and utilities sectors on GPP together with the update to the EPA Guidance on GPP.
GPP is high on the policy agenda particularly with the renewed focus on achieving net-zero emissions by 2050 and the commitments made at COP26. The drive towards greater implementation of GPP will undoubtedly influence suppliers who tender for government contracts to bolster their green credentials and to develop green solutions and technologies. Businesses that do not adapt to the green agenda in Ireland are set to lose out on the €15bn annual public procurement expenditure on works, supplies and services. Businesses that do adapt will have new opportunities to deliver innovative solutions and contribute to sustainable procurement in the circular economy.
For more information on this topic please contact Anna-Marie Curran, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.
Date published: 11 November 2021