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Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 1', 'art 2', 'art 3', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art. 23', 'art. 53', 'art. 53', 'art 1']

⭐Costs and Benefits of Green Public Procurement in Europe. - Final Report -
Costs and Benefits of Green Public Procurement in Europe. - Final Report -
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1 Costs and Benefits of Green Public Procurement in Europe Service contract number: DG ENV.G.2/SER/2006/0097r - Final Report - Part 1: Comparison of the Life Cycle Costs of Green and Non Green Products Part 2: Additional Costs for Individual Purchasing Authorities of Buying Green Products (Administrative and Product Costs) Part 3: The Potential of GPP for the Spreading of New/Recently Developed Environmental Technologies Case Studies Freiburg, 26 July 2007 Authors Öko-Institut e.v. Ina Rüdenauer Miriam Dross Dr. Ulrike Eberle Carl-Otto Gensch Kathrin Graulich Katja Hünecke Yvonne Koch Martin Möller Dr. Dietlinde Quack Dominik Seebach Wiebke Zimmer ICLEI Mark Hidson Peter Defranceschi Philipp Tepper Öko-Institut e.v. Freiburg Head Office PO Box Freiburg Germany Tel. +49 (0) Fax +49 (0) Address for visitors: Merzhauser Str. 173 D Freiburg Darmstadt Office Rheinstr Darmstadt Germany Tel. +49 (0) Fax +49 (0) Berlin Office Novalisstr Berlin Germany Tel. +49 (0) Fax +49 (0)2 Disclaimer Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission.3 Costs and Benefits of Green Public Procurement in Europe Overview 1. Part 1: Comparison of the Life Cycle Costs of Green and Non Green Products 2. Part 2: Additional Costs for Individual Purchasing Authorities of Buying Green Products (Administrative and Product Costs) 3. Part 3: The Potential of GPP for the Spreading of New/Recently Developed Environmental Technologies Case Studies 4. General Recommendations4 5 Costs and Benefits of Green Public Procurement in Europe Service contract number: DG ENV.G.2/SER/2006/0097r Part 1: Comparison of the Life Cycle Costs of Green and Non Green Products Final Report Freiburg, 26 July 2007 Authors Öko-Institut e.v. Ina Rüdenauer Miriam Dross Dr. Ulrike Eberle Carl-Otto Gensch Kathrin Graulich Katja Hünecke Yvonne Koch Martin Möller Dr. Dietlinde Quack Dominik Seebach Wiebke Zimmer ICLEI Philipp Tepper Öko-Institut e.v. Freiburg Head Office PO Box Freiburg Germany Tel. +49 (0) Fax +49 (0) Address for visitors: Merzhauser Str. 173 D Freiburg Darmstadt Office Rheinstr Darmstadt Germany Tel. +49 (0) Fax +49 (0) Berlin Office Novalisstr Berlin Germany Tel. +49 (0) Fax +49 (0)6 Disclaimer Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission.7 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) Contents Notation of numbers VII 1 Introduction 1 2 Goal and scope of the study 1 3 LCC methodology Introduction to LCC Integration of LCC in public procurement Guiding principles and general aspects Life cycle perspective Function based approach and functional unit Iterative approach Actor specific calculation System boundaries Transparency and confidentiality Data availability and uncertainty Modelling aspects External costs Currency exchange rates Current and future prices for operating media Discounting Allocation Use and transfer of the results 17 4 Selection of a sample of representative Member States Rationale for the selection Selection of Member States for product group 6 ( Electricity ) 22 5 Life cycle cost analysis by product group Product group 1: Construction work Selection of different product types Green and non green versions, calculation and cost elements Product type 1.1: Boilers for central heating 26 I8 Costs and Benefits of Green Public Procurement in Europe (Final Report) Product type 1.2: Office lighting Product type 1.3: Indoor paints Product group 2: Buses and bus services Selection of different product types Green and non green versions Calculation and cost elements Product type 2.1: Standard public transport buses Product type 2.2: Articulated public transport buses Product type 2.3: Minibuses Summary of results and conclusions Product group 3: Passenger cars Selection of different product types Green and non green versions Calculation and cost elements Product type 3.1: Subcompact and compact cars Product type 3.2: Medium-sized cars Product type 3.3: Light-duty vehicles (LDV) Sensitivity Analysis Summary and conclusions Product group 4: Cleaning products and services Selection of different product types Green and non green versions Calculation and cost elements Limitations Product type 4.1: Cleaning of office space Product type 4.2: Cleaning of sanitary facilities Product type 4.3: Window cleaning Summary and conclusions Product group 5: Clothing Selection of different product types Green and non green versions Calculation and cost elements Results of the market research Conclusions 104 II9 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) 5.6 Product group 6: Electricity Selection of different product types Green and non green versions Functional unit System boundaries Results Conclusions Product group 7: IT devices computers and monitors Selection of different product types Green and non green versions Calculation and cost elements Product type 7.1: Desktop computer Product type 7.2: Mobile computers / notebooks Product type 7.3: Computer displays Product group 8: IT devices printers and copiers Selection of different product types Green and non green versions Calculation and cost elements Product type 8.1: Single-function printers (ink jet) Product type 8.2: Single-function printers (electro photography) Product type 8.3: Multifunctional devices (electro photography) Summary and conclusions Product group 9: Food Selection of different product types Organic food in the selected Member States Green and non green versions Calculation and cost elements Product type 9.1: Coffee Product type 9.2: Tomatoes Product type 9.3: Potatoes Product type 9.4: Chicken Conclusions Product group 10: Paper Selection of different product types 168 III10 Costs and Benefits of Green Public Procurement in Europe (Final Report) Green and non green versions Calculation and cost elements Product type 10.1: Copying paper Product type 10.2: Envelopes Product type 10.3: Toilet paper Conclusions Product group 11: Furniture Selection of different product types Green and non green versions Calculation and cost elements Product type 11.1: Mobile cabinets Product type 11.2: Open storage units Product type 11.3: Office chairs Conclusions Overall Conclusions References Annex Documentation of market research Product group 1: Construction work Product group 2: Transport Buses and bus services Product group 3: Transport Passenger cars Product group 4: Cleaning products and services Product group 5: Clothing Product group 6: Electricity Product group 7: IT devices computers and monitors Product group 8: IT devices printers and copiers Product group 9: Food Product group 10: Paper Product group 11: Furniture Further information Statistical analysis development of electricity prices Consumption figures of the selected products in product group 9 (Food) 229 IV11 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) Standards and regulation in product group 9 (Food) More detailed results of product group 10 (Paper) 231 V12 Costs and Benefits of Green Public Procurement in Europe (Final Report) Abbreviations ADAC CC CHP CNG CO 2 DTPA ECF EDTA EEV EMS EP FSC GO GPP GPU GV HE-CHP IJ ipm IT LCC LCCA LCD LDV LPG MFD n.a. NO X NPV OM PEFC Allgemeiner Deutscher Automobil-Club Cylinder Capacity Combined Heat and Power generation or the electricity produced with this technology, respectively Compressed Natural Gas Carbon Dioxide Diethylene Triamine Pentaacetic Acid Elemental Chloride Free Ethylene Diamine Tetraacetic Acid Enhanced Environmentally-friendly Vehicle Environmental Management System Electro Photography Forest Stewardship Council Guarantee of Origin (either for RES-E or CHP) Green Public Procurement Graphics Processing Unit Green Version High-Efficient Combined Heat and Power generation, or the electricity produced with this technology, respectively Ink Jet images per minute Information Technology Life Cycle Costs / Life Cycle Costing Life Cycle Cost Analysis Liquid Crystal Display Light-Duty Vehicles Liquefied Petroleum Gas Multifunctional Device not applicable Nitrogen Oxides Net Present Value Operational Mode Approach Pan European Forest Council VI13 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) PVC RES-E SCR SFD TCF TCO TEC TED UDC WEEE Polyvinyl Chloride Electricity being produced out of Renewable Energy Sources Selective Catalytic Reduction Single Function Device Totally Chloride Free Swedish Confederation for Professional Employees Typical Electricity Consumption Tenders Electronic Daily Upgradeable Digital Copier Waste Electrical and Electronic Equipment Notation of numbers The numbers in this study are written according to DIN 1333 ( Zahlenangaben ) and DIN 5008 ( Schreib- und Gestaltregeln für Textverarbeitung ). This means that the comma, is the separator between the integer and the decimal part of a number. Numbers with more than three digits are divided by a blank in groups of three digits (in case of monetary values the numbers are divided by a dot in groups of three digits). Examples: The price of electricity is 0,18 per kwh Germany has inhabitants The price of a television set is Due to calculational reasons, the numbers of some data in this study suggest a higher precision than there is in reality. Please note that in general only two counting digits can be assumed as level of precision. VII14 15 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) 1 Introduction Due to the market power of the purchasing activities of public authorities, green public procurement can make an important contribution to reducing environmental impacts and to changing unsustainable production and consumption patterns. Beside the direct positive effects on the environmental impacts, GPP can also stimulate innovation of environmental technologies (demand-pull effect) and serve as an example for private procurement. However, according to the findings of a previous study which mapped the status of GPP in the (then) 25 Member States, there is still a lot of space for improvement regarding GPP in all Member States (Bouwer et al and 2006). Amongst others, the main barrier for GPP is the perception that environmentally friendlier products would be more expensive (Bouwer et al. 2005: 27), which has been the result of earlier studies also (see e.g. Günther 2003). In order to gain more insight into the real situation regarding the costs and benefits of GPP, the study at hand had been put out by the Commission to Öko-Institut e.v. and ICLEI Local Governments for Sustainability. The entire study comprises 3 tasks: Task 1: Task 2: Task 3: Comparison of costs / market research: collection of information on the costs of green public purchasing as compared to non green purchasing (Additional) costs for individual purchasing authorities of buying green products (administrative and product costs) Potential of GPP for the spreading of new/recently developed environmental technologies The report at hand (Part 1) covers Task 1. 2 Goal and scope of the study The goal of task 1, the study on Costs and benefits of Green Public Procurement in Europe, is to compare the economic costs and benefits of GPP versus standard purchasing for national governments and individual purchasing authorities. In order to achieve this goal, the life cycle costs of green product versions were compared to those of non green product versions for 2 product types in the following 11 product groups: 1 1 These 11 product groups were selected for this analysis by the Commission, based on the findings of the study of Bouwer et al. 2006, which identified them as being suitable for immediate greening. 116 Costs and Benefits of Green Public Procurement in Europe (Final Report) 1. Construction work 2. Transport: buses and bus services 3. Transport: passenger cars 4. Cleaning products and services 5. Clothing 6. Electricity 7. IT devices: computers and monitors 8. IT devices: printers and copiers 9. Food 10. Paper 11. Furniture The following figure clarifies the terms product group, product type and versions. Figure 1 Differentiation between the terms product group, product type and versions As differences in costs between the Member States can be expected, a representative sample of Member States was selected, for which the analysis was carried out (see section 4). The results of this study shall feed into the Impact Assessment, setting out the social, economic and environmental impacts of policy options proposed in a Commission Communication. The main objective of this Communication will be to foster the 217 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) implementation of national strategies for GPP based on EU-wide target setting and regular monitoring and benchmarking. Next to actual results of the LCCA for green versus non green product versions in the considered product groups, the applied LCC-methodology is also seen as an important means to foster the implementation of GPP. Therefore, the study at hand also gives a detailed description of the LCC methodology and a short guidance on how to use and transfer the results (to other products or Member States). After the detailed description of the LCC methodology (see section 3), section 4 elaborates on the selection of the four Member States. The section on the LCCA of the 11 product groups (section 5) is structured consistently. However, due to the differences of the products analysed, it was not possible to give all product groups an identical structure. The following paragraphs shortly describe the single work steps conducted for the LCCA in each of the 11 product groups, which also give the thread through the sections on each product group. (1) Selection of three typical product types within each product group, specification of green versus non green version Most of the 11 product groups cover a broad range of product types with different benefits as well as different environmental performances and costs. Therefore, a representative selection of three product types was made within each product group 2. The selection focuses on high priority products or services, taking into account environmental impacts, the relevancy for procurement, as well as products being representative for their product category or the analysed country. For each product type, a green and a non green version was compared. Bouwer et al. (2005) recommend in their conclusions that purchasers in Member States should be stimulated to use the criteria of eco-labels, even if they are not European labels or not from their own country. Also, the European Commission (2004b) states that contracting entities that wish to define environmental requirements for the technical specifications of a given contract may use, but are not obliged to use appropriate specifications that are defined in eco-labels, such as the European Eco-label, (multi-)national eco-labels or any other eco-label provided that 2 An exception is product group 6 ( Electricity ), where it is not possible to define three different product types. Instead, in this product group three different green versions are compared to one non green version. Additionally, in some product groups it has not been possible to gain prices and costs for three product types. To somehow compensate for that in product group 9 ( Food ) four product types have been analysed. 318 Costs and Benefits of Green Public Procurement in Europe (Final Report) the requirements for the label are drawn up and adopted on the basis of scientific information using a procedure in which stakeholders [ ] can participate, and provided that the label is accessible and available to all interested parties. Criteria to select green versions were therefore mainly derived from existing European or national product labels, but also publicly available from green procurement guidelines or comparative product assessments. An important aspect was to select product versions which are directly comparable regarding the function they provide and the quality of this function (see also section 3.3.2). The selection of the product types is described in the respective sections on the product groups. (2) Definition of cost elements and additional parameters for each product group The nature of life cycle costs depends on the specific product group. Depending on the product group and type, different cost elements were taken into account. As outlined in section 3.3.1, relevant cost elements can be grouped into three main categories: purchase and installation, costs during use phase and costs for disposal. To calculate the life cycle costs, next to the cost elements additional parameters regarding use patterns or the overall life time of the products had to be defined. Examples are the mileage per year for buses and bus services or passenger cars, time in on-/stand-by-/offmode and prints per year for IT devices, overall electricity demand, and so on. The relevant cost elements and additional parameters for each product group and type are described in the respective sections on the product groups. (3) Market research, calculation and comparison of life cycle costs For each product type, including green and non green version, data on product specific cost elements and additional parameters was collected in/for each selected Member State. Various data sources were used for the market research, like European or national statistics, European or national industry associations (e.g. for market data, data on use patterns or contacts to manufacturers), individual manufacturers, national procuring authorities or internet research. With this data the LCC of the three product types in each of the 11 product groups were calculated, comparing the green and non green version for each product type. 419 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) 3 LCC methodology 3.1 Introduction to LCC The core methodology that will be applied to calculate the costs and benefits of GPP versus standard purchasing for national governments and individual purchasing authorities is the methodology of life cycle costing (LCC). LCC is generally defined as assessment of all costs which are connected with a certain product, directly covered by one or several actors in the life cycle of this product (Hunkeler et al. 2007). In the study at hand the costs for the procuring authority are assessed. Life cycle costing (in contrast to only focusing on the purchase price) is especially useful if a relevant share of costs incurs during the use or endof-life phase of the analysed products or services. Life cycle costing has already been applied in the beginning of the early 20 th century for purchasing decisions in the US. Traditionally, LCC is mainly used for larger investment goods or products with a long life span and high initial costs (e.g. public buildings, power plants, military equipment). In recent years, the LCC concept also gained more attention in the discussion on life cycle assessment (LCA) and sustainability management 3 and also in the context of GPP. LCC is seen as one important means to foster GPP, as it is assumed that more environmental friendly products might have a higher purchase price on the one hand, but on the other hand presumably have lower follow-up costs due to lower costs for maintenance, energy and/or water consumption and/or disposal. 4 Regarding the conduction of a life cycle cost analysis (LCCA) there are several international and national standards and guidelines for special applications (e.g. ISO :2001, DIN EN , DSR 2005). Some aspects are also covered by conventional investment cost calculation methods, which can and should be considered in a LCCA, e.g. regarding dynamic aspects of the LCC. (Walz/Gramlich 2004) 3 4 For example in 2002 a SETAC (Society of Environmental Toxicology and Chemistry) working group on LCC was established (de Haes et al. 2002; Hunkeler and Rebitzer 2003) with the goal of harmonising various LCC approaches and developing a guiding document for LCC. The book is planned to be published within 2007 (Hunkeler et al. 2007). See for example the respective section on the EU GPP website (http://ec.europa.eu/environment/gpp/gpp_and_life_costing_en.htm) 520 Costs and Benefits of Green Public Procurement in Europe (Final Report) 3.2 Integration of LCC in public procurement Life cycle costs can play a role in two different stages of the procurement process: (1) when drawing up the technical specifications of the call for tender, and (2) when awarding the contract according to criteria that have been included in the call. In addition, life cycle costs can be included in variants. Technical specifications describe the subject matter of the contract in a way every bidder can understand the same, so that the procurement officer receives bids which he can compare. Technical specifications define the criteria that every bid has to fulfil. According to art. 23 of the relevant Procurement Directive 2004/18/EC, technical specifications can also contain environmental criteria. It is allowed to include life cycle costing aspects into the specification. The procurement units can e.g. demand that the product has a specific minimum life span, or that the material can be recycled after use. If the procurement officer is not certain that there are products on the market that meet the requirements in regard to life cycle costs, he or she can also ask bidders to submit green variants. All offers then have to fulfil the same basic set of requirements. In addition, the call for tender can ask for green variants that especially take life cycle costs into account. Life cycle costs are especially interesting when drawing up the award criteria. Under European procurement law it is possible to award the contract either based on the lowest price, or on the tender that is economically most advantageous (art. 53 of the Directive 2004/18/EC). To decide whether a tender is economically advantageous, different criteria (award criteria) can be taken into account. These also include environmental criteria. Generally all criteria have to be linked to the subject matter of the contract; shall not confer an unrestricted freedom of choice of the contracting authority; shall be expressly mentioned in the tender documents; and shall not infringe on EU law. These requirements reflect established case law of the European Court of Justice (ECJ). The first condition is always met in the case of award criteria that relate to life cycle costs: Life cycle costs are defined as the sum of all costs, which are connected with a certain product or service, covered by the procuring authority in the entire life cycle of this product. As such, they have a direct link to the contract to be awarded and will generally not infringe on the basic principles of EC law such as non-discrimination and transparency. The fact that the life cycle costs of the product or service are used as one of the criteria to award the contract has to be mentioned in the tender documents. In addition, the relative weighting that is given to each of the criteria has to be specified in the tender documents according to art. 53 of the Directive 2004/18/EC. 621 Collection of Evidence Related to the Costs and Benefits of Green Public Procurement (Part 1) 3.3 Guiding principles and general aspects LCC will be conducted with respect to several guiding principles and general methodological aspects, which are described in the following paragraphs Life cycle perspective LCC considers the entire (physical) life cycle of a product, from production to disposal. Depending on the perspective taken in an LCCA, the costs of the different stages can be calculated more or less detailed. For example, in the study at hand the production costs of the products to be purchased are not calculated in detail, as the relevant cost element for the purchasing authority is the price for the final product. However, the purchasing price (usually) comprises all costs for producing the respective product plus a certain profit margin. The LCC analysis will be conducted under the perspective of an individual purchasing authority. This means that all costs which are connected to the defined product types and versions, and which have to be borne by the purchasing authority are included in the LCC. In general the following cost elements are included: Purchase and installation: The cost of purchase is relevant in most cases, except if a leasing system is chosen instead of acquiring property of the product. Additional installation costs might incur in some cases, e.g. in case of heating devices. Costs during the use phase of the products: In many cases the costs during the use phase are at least as important as the purchase or installation costs. Costs which are relevant during the use phase are for example costs for - electricity: e.g. for lighting, heating, IT devices; - fuel, gas, etc.: e.g. for buses, passenger cars, heating; - consumables: e.g. for printers and copiers (toner or ink, paper ); - training: e.g. for bus and car drivers, if relevant; - service and maintenance, e.g. possibly applicable to large multifunctional imaging equipment; or - other: e.g. taxes, insurance costs, government aid, etc. Disposal costs: For some of the product groups the costs (or fees) for the disposal of waste from public authorities strongly depend on current regulations. For example, waste electrical and electronic equipment (WEEE) from public authorities can be 722 Costs and Benefits of Green Public Procurement in Europe (Final Report) disposed free of charge in the EU if this waste is similar in nature and quantity to that of private households 5. For each product the relevant cost elements are considered. Relevant means that the costs for this element either are different for the green and the non green version, or that the costs account for a substantial part of the overall costs connected to the product or service. Taking costs into account, even if there are no differences between the green and non green version, is important for evaluating the relevance of the differences in costs between the two versions: if a substantial part of the costs is excluded from the cost assessment, the differences between the green and non green version seem more relevant than if all costs are included. However, a reasonable choice has to be made when defining the relevant costs, as in some cases it will not be possible (and will not make sense) to include all possible costs. The decision, which cost elements are considered in the LCCA, is described more detailed in the sections on the regarded product groups and types Function based approach and functional unit An LCCA is always conducted for a certain function which has to be fulfilled by the analysed system. This function is quantified by the functional unit, which provides a reference to which all costs are related. The functional unit has to be equivalent for both versions (green and non green) of the analysed product or service types. This principle is most important, as otherwise products or services would be compared, which actually are not comparable. For example, it does not make sense to compare a subcompact passenger car, mostly used to transport one person with little equipment over short distances, with a light-duty vehicle of up to 2.8 tonnes (permissible maximum weight) to transport certain goods. Similarly, this approach ensures that not only certain products are compared, but all processes which are necessary to deliver a certain function. For instance, it does not make sense to compare only the prices of two different detergents, but one has to consider all elements necessary to fulfil the function of cleaning a certain item or surface, such as direct labour costs, administrative costs, etc. 5 Article 3 (k) WEEE Directive defines WEEE from private households as WEEE which comes from private households and from commercial, industrial, institutional and other sources which, because of its nature and quantity, is similar to that from private households. 8 View more
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