Commission staff working document accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Public procurement for a better environment - Summary of the impact assessment {COM(2008) 400 final} {SEC(2008) 2124} {SEC(2008) 2126}
Date: 2008-07-02
Institutions: European Commission
Subjects: eco-label, economic growth, goods and services, public contract

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2008 
SEC(2008) 2125  

COMMISSION STAFF WORKING DOCUMENT 

accompanying the  

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Public procurement for a better environment  

SUMMARY OF THE IMPACT ASSESSMENT 

{COM(2008) 400 final} 
{SEC(2008) 2124} 
{SEC(2008) 2126} 

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SUMMARY 

Our  current  consumption  in  the  EU  causes  environmental  damage  at  rates  that  are 
unsustainable.  If  the  world  as  a  whole  followed  traditional  patterns  of  consumption,  global 
resource use might quadruple within 20 years. It is necessary therefore to stimulate the faster 
development and diffusion of environmentally beneficial products. 

Public authorities yearly spend a sum which equals 16 % of EU GDP, particularly in sectors 
with  relatively  high  environmental  impacts  and  at  the  same  time  serious  scope  for 
improvement (transport, buildings and building fittings..). For instance, buildings account for 
approximately 40 % of the final energy consumption in Europe. For most public authorities, 
construction and renovation works, and running costs of buildings represent a major share of 
annual expenditure, in some cases over 50 %. By using GPP in the implementation of these 
works, stricter environmental standards would be applied, which could importantly reduce the 
overall energy consumption of these public buildings. 

Green  public  procurement  (GPP)  is  defined  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. It is a process that promotes, but not necessarily leads to, the purchase 
of a "green" product and which fully respects the EU legislation on public procurement.  

The purchase of more resource efficient products can bring direct benefits to the purchasers 
and  significantly  cut  costs  for  users,  even  where  the  initial  expenditure  is  higher.  Examples 
are office equipment, lighting, vehicles, buildings.  

GPP furthermore rewards firms that develop such goods and provides incentives for the future 
development  of  technologies,  promoting  innovation  that  supports  the  EU  economy.  This 
increased demand will lead to economies of scale, allowing products to move into mainstream 
markets. GPP may stimulate greater and faster technological innovation or breakthrough that 
will ultimately lead to lower unit costs and mass market availability.  

Where GPP leads to the purchase of greener products, the reduced environmental impact from 
those  products  will  contribute  to  achieving  existing  environmental  goals  –  and  could  do  so 
more cheaply than other available policy instruments. 

Considering this huge potential, GPP has received growing political attention in recent years, 
starting  with  the  Communication  on  Integrated  Product  Policy  of  2003  in  which  Member 
States have been strongly recommended to adopt national action plans on GPP. Also outside 
Europe, green or sustainable procurement policies have been launched in most important trade 
partner countries, such as the USA, Japan, Canada, Australia, followed by rapidly developing 
countries such as China, South Korea, Thailand, Philippines. The OECD Council has -already 
in  2002-  adopted  a  Recommendation  on  green  public  procurement.  As  a  follow-up  of  the 
Johannesburg  summit  on  Sustainable  Development  of  September  2002,  a  Marrakech  Task 
force  on  sustainable  procurement  was  created  with  the  aim  of  spreading  sustainable  (green) 
public procurement practices in particular in developing countries. 

Most recently, the EU leaders have, in their renewed EU Sustainable Development Strategy 
adopted June 2006, set forth an EU wide target for GPP, stating that, by the year 2010, the 
average  level  of  EU  GPP  up  to  the  standard  currently  achieved  by  the  best  performing 
member states. 

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Research  carried  out  in  2006  has  shown  that  only  7  Member  States  were  practising  a 
significant  amount  of  GPP  and  that  in  the  remaining  20  Member  States,  GPP  was  applied 
much less, or not at all.  

The  EU  Commission's  Directorate-General  for  the  Environment  has  prepared  an  impact 
assessment  as  a  basis  for  the  adoption  of  a  new  initiative  on  GPP,  aimed  at  increasing  the 
quantity and quality of GPP in the EU. The various options analysed in the light of the impact 
assessment have been discussed with stakeholders, at a meeting on 25 June 2007, and through 
subsequent  contacts  in  writing.  The  members  of  the  Advisory  Committee  on  Public 
Procurement have also been invited to comment upon various policy options. 

Following problems have been identified as hindering EU wide uptake of GPP: 

(1) 

Lack  of  awareness  of  benefits,  misperception  of  the  extent  of  costs,  and  lack  of 
political support for GPP 

(2) 

Lack of legal clarity 

(3) 

(4) 

Lack  of  information  and  tools  for  GPP,  inadequate  training  structures,  lack  of 
knowledge of priority areas and absence of easy to apply GPP criteria 

Lack  of  similarity  between  GPP  procedures  and  criteria  across  the  EU,  which  also 
results  in  increased  administrative  costs  in  particular  for  SMEs  and  hindering  the 
internal market  

The Commission services have identified a series of actions and measures aimed at radically 
increasing the quantity and quality of GPP in the EU 27. Those actions can be bundled into 
different policy options.  

Option 1 relates to "Business as usual": the Commission would continue to provide guidance 
on  its  GPP  website,  including  relevant  studies  and  the  GPP  Handbook,  and  hold  regular 
meetings with national GPP experts to exchange best practice.  

Option  2  would  consist  of  a  package  of  support  measures  providing  guidance,  formulating 
recommendations  and  laying  the  basis  for  actions  to  increase  and  improve  GPP  in  the  EU, 
some  of  which  would  be  delivered  through  a  Communication.  This  option  would  allow  to 
address all 4 problems through various measures/actions: 

•  set an EU-wide –voluntary- target for GPP, based on a quantification of the SDS 

target; 

•  highlight existing and provide additional operational guidance on GPP; 

•  provide legal clarity on certain issues; 

•  identify  priority  product  and  service  groups  and  kick-off  a  process  of  increased 
co-operation  with  the  Member  States  and  relevant  stakeholders  to  establish  core 
and comprehensive common GPP criteria for those product groups;  

•  stimulate  GPP  awareness  raising  and  training  through  dissemination  of  GPP 
training  toolkit,  creation  of  plate-forms  of  regional  and  local  co-operation  and 
recommending use of GPP in the implementation of EU funded projects; 

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•  identify  indicators  for  GPP  and  ensure  regular  monitoring  and  benchmarking 

based on these indicators. 

Option  3  would  consist  of  mandatory  targets  for  GPP,  through  a  legal  instrument;  various 
alternative sub-options for targets could be envisaged: 

•  mandatory targets for basic GPP  

•  mandatory targets for "outcome-based" GPP  

•  mandatory targets for life cycle costing 

Option 4 would consist of various forms of mandatory GPP, through a legal instrument or a 
modification  of  an  existing  legal  instrument;  various  alternative  sub-options  could  be 
envisaged: 

•  mandatory  GPP  for  certain  types  of  contracting  authorities  (central  government) 

when purchasing certain types of products or services (yet to be identified); 

•  mandatory  GPP  for  all  contracts above the thresholds  of the  public  procurement 

Directives 

•  mandatory  implementation  of  an  environmental  management  scheme  for  all 

service and works contracts above certain thresholds. 

•  mandatory  use  of  GPP  in  the  implementation  of  EU  funded  projects,  where 

appropriate 

Option  5  would  consist  of  a  proposal  to  modify  the  Standard  forms  on  GPP,  through  the 
modification of a legal instrument, in view of facilitating monitoring of GPP, as an essential 
element of any voluntary or mandatory GPP policy. 

The impact assessment has shown that: 

Only minor improvements may be expected under the "business as usual" scenario (Option 1) 
because the underlying problems will not be properly addressed. Furthermore, as the uptake 
of GPP slowly rises, differences between the practices of Member States are likely to create 
increased market distortions and additional administrative costs for suppliers and only provide 
very limited stimulus for eco-innovation. 

Option 2 which presents a package including support, guidance, recommendations and actions 
for  increased  GPP,  some  of  which  will  be  delivered  through  a  Communication,  is  –at  this 
moment in time- the preferred option. It is indeed the most effective option for addressing the 
problems related to the lack of information on costs and benefits, the lack of legal clarity and 
the overall lack on harmonised information and tools for GPP.  

A  clear  target,  even  voluntary,  would  act  as  a  political  driver  for  Member  States  to  step  up 
their efforts in the field of GPP. It is likely to encourage the establishment and use of central 
guidance  on  GPP,  coupled  to  internal  targets  and/or  to  political  or  legal  instructions  to 
selected (or all) regional and local authorities. The existence of a political target would also 
provide  an  indication  to  industry  of  the  likely  direction  of  demand  for  greener  products  in 
coming decades, allowing them to early respond to this new demand and plan innovation. 

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Providing operational guidance on GPP may help Member States to build up their own GPP 
strategies and increase GPP. It could substantially reduce the costs typically associated with 
setting  up  and  implementing  GPP  processes.  It  may  also  lead  authorities  to  other  ways  to 
reduce their costs and increase the effectiveness of their GPP. For instance, joint procurement 
(combining the procurement actions of two or more public authorities) may lead to economies 
of scale through bundled demand and reduce administrative costs by exchanging experience 
on GPP criteria and on new products available on other than local markets. Guidance on the 
inclusion of whole-life-costing as an award criterion will also encourage purchasers to apply 
GPP,  as  it  will  show  that  GPP  is  in  many  cases  nothing  else  than  efficient  procurement, 
allowing to save money in the long run. 

Contacts with stakeholders have made clear that, notwithstanding the new public procurement 
Directives  of  2004  which  expressly  allow  for  the  inclusion  of  environmental  criteria  in 
tendering procedures, there still is legal uncertainty. Indeed,  Member States and  contracting 
authorities have raised the need to clarify the possibility to define the product to be purchased, 
by  reference  to  environmental  criteria  related  to  the  production  process  of  the  relevant 
product.  There  also  is  uncertainty  over  evidence  which  may  be  requested  from  bidders  to 
demonstrate  compliance  with  technical  specifications  or  selection  criteria.  The  provision  of 
core-criteria  would  remove  one  of  the  greatest  hindrances  to  GPP,  removing  one  of  the 
greatest costs and causes of difficulty for practitioners. It would be likely to provide greater 
consistency  in  the  product  characteristics  asked  for  by  authorities  and  give  greater 
transparency  to  producers  and  so  better  signalling  of  rewarding  innovation  opportunities, 
whilst also reducing their administrative costs from having to provide environmental product 
information in different procurement processes. 

The  creation  of  plate-forms  of  co-operation  and  the  recommendation  to  use  GPP  when 
implementing  EU  funded  projects  would  be  particularly  effective  at  initiating  the  uptake  of 
GPP  by  local  authorities,  who  are  traditionally  more  difficult  to  reach  in  view  of  raising 
awareness on GPP, providing political support, guidance and training.  

As  regards  the  costs  for  implementing  GPP,  GPP  would  in  principle  lead  to  better 
consideration of the life cycle costs of the product. In particular in cases of resource efficient 
products, buying "green" products can also mean buying "cheaper" products for the purchaser 
over  their  lifetime.  A  recent  study  on  the  costs  and  benefits  of  GPP  has  concluded  that  the 
administrative costs for setting-up and implementing GPP in a local authority in Europe are 
somewhat  higher  than  for  standard  procurement.  The  biggest  cost  driver  is  the  continuous 
awareness raising, training and support for procurers. Costs for setting up the policy are low 
compared to the overall procurement budgets. There may be some additional costs resulting 
from  the  search  of  environmental  criteria  in  procurement.  The  GPP  criteria  and  guidance 
proposed by the Commission would significantly reduce those additional costs.  

The costs for providing additional guidance to fill the gaps will be negligible compared to the 
sums  involved  in  GPP,  and  borne  by  the  Commission.  The  costs  for  dissemination  through 
regional and local networks would fall mainly on the Commission, through the administration 
of  programmes  offering  support  and  through  grants  for  relevant  projects.  The  Commission 
will also bear the costs for developing appropriate calculation methods and monitoring GPP. 
In the absence of legally binding rules, there will be no particular monitoring obligation for 
the Member States. 

In  conclusion,  all  sub-options  under  option  2  can  be  implemented  without  great  additional 
costs for contracting authorities, or for the Member States.  

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However, the impact assessment has also shown that, to maximize the aggregate benefits of 
all complementary sub-options under option 2, increased political support is imperative. The 
most effective way of raising political support is through the adoption of mandatory measures. 
The impact assessment has already identified a series of mandatory options which would have 
the effect of raising political support to varying degrees, ranging from mandatory targets for 
GPP  to  mandatory  GPP  for  all  contracts  covered  by  the  public  procurement  Directives, 
including  a  modification  of  the  standard  forms  for  public  procurement  to  ease  monitoring. 
Since all mandatory options would call for the adoption of a legal instrument or a proposal to 
modify an existing legal instrument, a separate, additional impact assessment would need to 
be carried out, in order to identify the best solution(s).  

This additional impact assessment will be carried out at a later stage, in view of adopting –
possibly-  the  appropriate  legal  instrument  to  complement  the  guidance  provided  in  the 
proposed Communication.  

In  view  of  monitoring,  the  Commission  would  propose  indicators  and  announce  continued 
support for establishing methods for calculating those indicators.  

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