Green Public Procurement

The successful transformation of the economy of the European Union towards a sustainable future, which underlies the European Green Deal, builds on a number of pillars and has an impact on practically all spheres of the EU economy and policies. From the supply of clean, affordable and secure energy to the acceleration of the transition to sustainable and smart mobility, the European Commission envisions various strategies to pursue the sustainable development pathway. An important role in this process is entrusted to public authorities, including the institutions of the European Union, and green public procurement is considered as part of the toolkit planned to promote this transformation.

The European Commission refers to the public procurement which boosts the sustainable economy as Green Public Procurement (GPP). It is expected that if it is widely spread in Europe, green public procurement will contribute to coping with the challenges related to the climate and the environment, achieving financial savings by public authorities and, last but not least, triggering innovation in the field of environmentally friendly products and services.

Essence

The European Commission defines the award of green public procurement as a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.[1]

In this sense, the award of green public procurement is not a separate process characterized by special rules as it is rather a set of environmental criteria applicable to the relevant public procurement insofar as such criteria are set by the contracting authority. Depending on the way it is worded, the “green aspect” of a public procurement procedure might be seen, for instance, in the technical specification requirements, the grounds for exclusion of bidders, the criteria for the selection of a contractor or for the award of the procurement or even in the contractual obligations of the contractor.

The green public procurement concept is applicable regardless of the contracting authority, the value or the subject-matter of the procurement. Nevertheless, the European Commission has identified ten priority sectors: 1. construction; 2. food and catering services; 3. transport and transport services; 4. energy; 5. office machinery and computers; 6. clothing, uniforms and other textiles; 7. paper and printing services; 8. furniture; 9. cleaning products and services; 10. equipment used in the health sector.[2] The consequence of the prioritisation of these sectors is that most of them already have appropriate criteria which could be applied by contracting authorities directly, as is seen below.

Mandatory Regulation

At present, green public procurement is a voluntary instrument. This means that each contracting authority is free to decide whether and how to apply environmental criteria to a public procurement procedure and what criteria to choose. This situation is expected to change in the context of the Green Deal since the European Commission has made it clear that public procurement is one of the spheres in which the legal framework will be updated to achieve the sustainable development goals.

With a view to the upcoming amendments, it is worth examining the existing legal framework which will be in force until the new rules are drafted and implemented.

The main legal act regulating public procurement at the EU level is Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (“Directive 2014/24/EU”). Some provisions of this Directive make it possible for “green” criteria to be used in public procurement procedures. The most important ones are as follows:

  • In the definition of the requirements to be laid down in the contract: explicit option  for technical specifications to include environmental characteristics (Article 42); labelling requirements to prove environmental characteristics provided that certain conditions are fulfilled (Article 43);
  • In the selection of suppliers/contractors: a breach of obligations under environmental law provides grounds for exclusion from participation in the procurement procedure (Article 57); requirements for compliance with environmental management standards (Article 62);
  • In the award of public procurement contracts: possibility for taking into consideration environmental characteristics (Article 67); life-cycle costing rules (Article 68);
  • In the performance of contracts: possibility for laying down special conditions, including environmental considerations (Article 70).

These criteria have been adopted by the Bulgarian lawmaker and transposed in the Public Procurement Act (PPA).

As well as Directive 2014/24/EC and the PPA respectively, the case law of the Court of Justice of the European Union further develops the rules on the introduction of environmental criteria in public procurement procedures. A landmark case in this respect is the Case of Concordia Bus Finland (Case C-513/99) which was the first to recognise the possibility for including considerations other than the price and quality of performance and, more specifically, considerations of an ecological nature, in the criteria for the assessment of the bids. It should be emphasized that such criteria are admissible only if the following conditions set out by the Court are met:

  1. The award criteria must be linked to the subject-matter of the contract;
  2. The award criteria must be specific and objectively quantifiable;
  3. The award criteria must have been expressly mentioned in advance;
  4. The award criteria must comply with the Community law.

These conditions are confirmed and further developed in the judgment in the Case of Wienstrom GmbH (Case C-448/01) where the Court gives additional substantiation of the need for the criteria to be clear and objective.

“Green” Criteria in Public Procurement

The European Commission has provided not only the mandatory legal framework but also a series of “green” public procurement criteria which are grouped in accordance with the subject-matter of the contracts.

Environmental criteria ready for including in tendering documentation have been developed for 20 groups of products and services so far. They cover a wide range of public procurement areas, including road design, construction and maintenance, road transport, office building design, construction and management, waste water infrastructure, and electricity.

Criteria are divided into selection criteria, technical specifications, award criteria and contract performance criteria. Each set of criteria consists of core criteria and higher-level criteria to be used by institutions which strive for greater support to the attainment of environmental and innovation objectives.

The advantage of the existence of criteria which are common for the whole European Union is that they do not lead to market distortions and reduction of competition that might result from the application of disparate national criteria. The set of criteria is expected to develop further.

Green Public Procurement and the Green Deal

As early as the time of the publication of the Communication presenting the Green Deal, the European Commission stated its intention to further develop the regulation of green public procurement by proposing further legislation and guidance[3]. To quote the Commission, “public authorities, including the EU institutions, should lead by example and ensure that their procurement is green”.

The investment pillar of the Green Deal, i.e. the European Green Deal Investment Plan, also envisages that the Commission will propose minimum mandatory green criteria or targets for public procurements in sectorial initiatives, EU funding or product-specific legislation[4]. Public authorities across Europe will be encouraged to integrate green criteria and use labels in their procurements. Meanwhile the Commission will propose a sustainable procurement screening instrument to ensure environmentally friendly large infrastructure projects.

[1] Communication from the Commission COM/2008/ 400 final.

[2] Ibid.

[3] Communication from the European Commission COM/2019/640 final.

[4] Communication from the European Commission COM/2020/21 final.