Europe's €2.5 trillion spending power could be harnessed for a greener future, but only if the European Commission takes decisive action. A coalition of 26 businesses and civil society organizations, representing over 11,500 companies, is urging the Commission to make low-carbon criteria mandatory in EU public procurement rules. This move could significantly impact the market and drive the adoption of cleaner technologies and production processes.
The letter, led by the Italian Climate Change think tank ECCO, highlights the potential of public procurement to create a powerful signal for the market. By spending around €2.5 trillion annually, public authorities can influence the demand for sustainable products and technologies. However, the current system is not fully exploiting this potential, creating a disconnect between the EU's decarbonization goals and market conditions.
Spain's renewable energy leadership and its emergence as a green hydrogen pioneer are notable examples of how public procurement can drive sustainable development. However, the energy sector experts caution against rapid expansion without addressing the need for zero-carbon electricity sources. The current procurement system, heavily focused on the lowest price, fails to reward companies that prioritize sustainability.
The coalition argues that the EU's Net Zero Industry Act, introduced in 2024, has not been effectively utilized due to its voluntary nature and varying application across member states. This fragmentation hinders the procurement process from becoming a reliable market signal for European industry. To address this, the coalition suggests making the 'most economically advantageous tender' approach the norm, allowing public authorities to consider carbon emissions and other factors alongside cost.
One of the key recommendations is to tie procurement to the EU's existing climate architecture, utilizing methodologies associated with the carbon market system and carbon border tax rules. This approach would ensure emissions data comparability without imposing additional reporting burdens on companies. The coalition emphasizes the need for a progressive introduction of these requirements, distinguishing between core mandatory criteria and additional reward criteria to encourage innovation and over-compliance.
Furthermore, the coalition calls for procurement rules to prevent public contracts from being awarded to suppliers with poor working conditions or global supply chain abuses. This ethical dimension is crucial for ensuring that the EU's spending power contributes to a sustainable and socially responsible future.
In conclusion, the coalition's proposal presents a compelling case for the EU to leverage its spending power for a greener economy. By mandating low-carbon criteria in public procurement, the Commission can create a powerful incentive for companies to invest in decarbonization. This move, combined with a focus on ethical procurement, has the potential to drive significant positive change and position the EU as a global leader in sustainable development.
