Germany: Green Public Procurement - More sustainability in public procurement

1. EU Green Deal and sustainability in the procurement procedures

Climate change is one of the current major challenges. To address this, the European Commission has presented the EU Green Deal in 2019 (Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions, The European Green Deal, COM/2019/640 final of 11.12.2019). With this strategy paper, the EU member states want to become climate neutral by 2050. In a first step, greenhouse gas emissions are to be reduced by at least 55% by 2030 compared to 1990 levels.

In order to implement the EU Green Deal, it is necessary to make public procurement more sustainable.

2. Development in Germany

In Germany, the issue of sustainability is also seen as one of the most important instruments in the fight against climate change. This also reflects the ongoing reform of public procurement law.

In this respect, the so-called Transformation Package of public procurement law through stricter sustainability requirements was already laid down in the coalition agreement 2021 - 2025 (More Freedom - Alliance for Freedom, Justice and Sustainability) of the current federal government with the aim of simplifying, professionalizing, digitalizing and accelerating public procurement procedures. The Federal Ministry of Economics and Climate Protection (Bundesministerium für Wirtschaft und Klimaschutz - “BMWK”) launched a public consultation on the modernization of public procurement law in December 2022 (Public Procurement Transformation Package), in which individuals and legal entities could participate by submitting comments until mid-February 2023. The BMWK identified five fields of action, for which notes could be submitted: strengthening environmentally and climate-friendly procurement (1), strengthening socially sustainable procurement (2), digitalisation of procurement (3), simplification and acceleration of procurement procedures (4) and promotion of SMEs, start-ups and innovations (5). The high level of participation, with a total of 441 comments, is a clear indication of the need for modernisation – especially regarding sustainability aspects.

3. Possibilities for including sustainability aspects in today’s procurement procedures

Public contracting authorities already have numerous options at their disposal to make procurement sustainable in the sense of so-called “Green Public Procurement”. In addition to traditional principles of economic efficiency, public contracting authorities are entitled to impose requirements of a social and environmental nature. According to the German Regulation on the Award of Public Contracts (Verordnung über die Vergabe öffentlicher Aufträge - “VgV”) - social and environmental aspects can be taken into account in the performance description. These aspects may concern the production, provision of the service, the life cycle or production and supply chains. The public contracting authority can verify the characteristics required in the performance specification by certificates from conformity assessment bodies or by quality labels. Sustainable aspects, such as the existence of an environmental management system, could also be checked in the selection criteria: in addition to price and performance, environmental or innovative characteristics can also be taken into account when determining the award criteria by the contracting authority.

4. Guidelines for environmentally friendly procurement of the Federal Environment Agency (UBA)

As a result of the greater emphasis placed on climate protection in the Transformation Package, the UBA's requirements, which have not previously been the focus of attention, will now become particularly important and should already be taken into account when bidding for public tenders in Germany - especially for companies from other countries.

In order to promote the sustainability aspects in public procurement, the UBA regularly publishes procurement guidelines on environmentally friendly procurement for various products. The product palette includes more than 25 different product groups and ranges from “System cloth towel rolls in cloth towel dispensers” to “low-emission flooring adhesives” and “interior wall paints”. Other guideline deal with IT products such as “mobile phones, smartphones and tablets”, “office equipment with printing function (printers and multifunctional devices)” but also “servers and data storage products”. As a rule, the guidelines contain recommendations on requirements with regard to the sustainability of the subject of the contract and the execution of the contract, that may be quality labels, certificates or certifications of a conformity assessment bodies. It can be assumed that contracting authorities will now make greater use of the UBA's recommendations when defining environmental criteria. It is therefore even more important that companies wishing to participate in tenders for the relevant products in Germany find out about the requirements, certificates, etc. at an early stage and implement them in their own companies so that nothing stands in the way of successful participation. Companies have a better chance of being awarded a contract if they have already studied the relevant UBA guidelines for their products and taken the sustainability requirements into account before participating in the tender.

Most recently, the UBA published a new guideline on green procurement for "servers and data storage products" in January 2023. The guideline is intended to help public purchasers procure energy-efficient equipment that reduces the energy consumption of data centres. As servers and data storage equipment are in operation all day, special attention must be paid to energy efficiency. An important aspect is the environmental performance of the materials used and the durability of the equipment. The directive makes specific reference to the requirements of the "Energy Star" label for energy efficiency and can be found here (https://www.umweltbundesamt.de/publikationen/leitfaden-zur-umweltfreundlichen-oeffentlichen-32).

5. Limits and conclusion

However, the implementation of sustainability criteria in the procurement process also faces limitations. One major obstacle to greater sustainability is, for example, the budget structure of public administrations. Public budgets usually work with annual budgets. In the procurement year, only the higher purchase price is seen and not the cost savings that only become effective in the following years. The primary goal is first to meet the existing procurement budget in the current year. Therefore, the price will ultimately remain an important criterion in the examination of the most economically offer, so companies that follow special environmental requirements should proactively point out to the contracting authorities the special importance of environmental aspects in the overall economic assessment of the next years.