I (Only) ten years of EU public procurement for a better environment

Public procurement regulation is an important legal instrument of policy-making that has to reconcile many, often opposing, goals. At EU level, procurement policies were originally used to open up the internal market for public procurement that had been subject to open protectionism, as countries directed their governments’ spending to domestic suppliers. EU law then followed a largely budgetary policy approach, aiming at the minimisation of costs and public spending through competition, by means of transparent procedures. The (traditional) use of procurement policy as an instrument for steering the economy and directing public spending to SMEs, employment schemes and other social goals was initially very much contested at EU level and largely developed through case law of the European Court of Justice.Footnote ⁵

Nowadays, public procurement satisfies a variety of concerns relating to: (1) anticorruption and transparency; (2) efficiency (the best value for money); (3) policy instruments, such as social and environmental considerations; (4) competition concerns; and (5) building an internal market for government procurement in the EU context.Footnote ⁶ At EU level, these objectives are dispersed across different portfolios in the Commission, sometimes in tension with one another. In addition, there is an important margin of manoeuvre for Member States in formulating some policies through procurement.Footnote ⁷

Politically speaking, an impetus for developing a green procurement policy framework developed relatively late. It was enshrined in the political agenda with the EU Sustainable Development Strategy (2001–2011) and the 6th Environmental Action Programme for 2002–2024 that identified green procurement as important, as did the Lisbon strategy and Europe 2020 within an economic context. Many NGOs have also lobbied for a less “technical” understanding of procurement rules in order to facilitate green procurement procedures.Footnote ⁸

The “environmental turn” in public procurement led to the adoption of several EU green public procurement framing measures, many of which are actually binding obligations on contracting authorities to procure “green”: specific mandatory GPP rules contained in the Energy Star Regulation (2008), to buy energy efficient IT office equipment; the Clean Vehicles Directive (2009), mandating environmental friendly vehicles; the Energy Performance of Buildings Directive (2010), introducing an obligation for new buildings owned and occupied by public authorities to be “nearly zero-energy” by end of 2018; and the Energy Efficiency Directive (2012), to purchase energy efficient buildings and equipment of the highest energy labelling class.

In 2003, the European Commission in its Communication on Integrated Product Policy Footnote ⁹ encouraged Member States to draw up publicly available National Action Plans for greening their public procurement. The subsequent 2008 Communication Public Procurement for a Better Environment outlined a framing support programme and encouraged Member States to devise National Action Plans for GPP. At the same time, political targets for the uptake of GPP were set for the Member States; the current target is that 50% of tendering procedures should be green. Within this policy initiative a number of soft policy instruments have been adopted, for instance providing greater support in the form of training, a helpdesk for contracting authorities, and the development of common EU GPP criteria in key sectors in order to provide legal guidance and certainty on what green procurement can look like in practice.

In this context, the Commission initiated the creation of common EU GPP criteria for frequently procured products and services in 2008. The EU GPP criteria are developed for different types of products and services.Footnote ¹⁰ They are voluntary model clauses for greening procurement tenders that are intended to assist contracting authorities in GPP, as outlined below.

II Green Public Procurement Criteria remain at best practice level without a dedicated legal act

Since 2010, a new process has been in operation for developing EU GPP criteria. The European Commission’s Joint Research Centre’s Institute for Prospective Technological Studies (JRC-IPTS) works on the basis of an annual GPP work plan, adopted in consultation with an informal GPP Advisory Group. The Advisory Group is composed of one Member State representative and five stakeholder representatives coming from civil society, industry, SMEs, public procurement and a local authority. The EU GPP criteria-setting process is similar to the EU Ecolabel criteria-setting procedure. Notably, it involves regular stakeholder consultations at various stages in the procedure.Footnote ¹¹

The GPP criteria are non-binding, which is a major contrast to the EU Ecolabel standards, and they are not formally adopted as a legal act. The GPP criteria are a supporting framework, providing concrete clauses of how to “green” public purchasing of the targeted products, and setting a non-binding level of ambition as to what is considered a sufficient “effort” in greening the purchasing. The GPP are therefore aspirational only, and form part of a soft policy approach. However, given that they are issued through formal EU processes, one may expect them to give rise to legitimate expectations vis-a-vis the administration and to have quasi-legal effect in terms of considering that clauses contained in the document can be regarded as legal, while those deviating from them may expect a higher degree of scrutiny.

III The challenge of formulating green criteria in accordance with the public procurement framework

EU public procurement law makes a sharp distinction between conditions relating to bidder Selection Criteria, Technical Specifications of the purchase, Award Criteria, and Contract Performance Clauses that are used in different phases of a tendering procedure. This distinction is often problematic. For “green procurement”, contracting authorities faced legal uncertainty not only regarding whether green procurement was allowed as such, but also how to formulate green tender specifications accurately in these specific categories in order to ensure that they are legal. Including environmental considerations in tender specifications remained a complex technicality that many administrators tried to avoid.

Selection criteria Footnote ¹² relate to the capacity of a bidder itself. There are certain mandatory exclusion criteria, but for instance conditions relating to the financial and technical capacity of bidders may be set by contracting authorities.

Technical specifications,Footnote ¹³ on the other hand, define the characteristics of the purchase that are required of a works, service or supply. They refer to the specific process or method of production or provision of the requested works, supplies or services, or to a specific process for another stage of its life cycle even where such factors do not form part of their material substance, provided that they are linked to the subject-matter of the contract and proportionate to its value and its objectives.

Contract award criteria Footnote ¹⁴ are the metric by which to compare bids that have been made. They are based on the most economically advantageous tender (MEAT), identified on the basis of the price or cost. The use of a cost-effectiveness approach, such as life cycle costing, is allowed,Footnote ¹⁵ and may include the best price-quality ratio, which shall be assessed on the basis of criteria, including qualitative, environmental and/or social aspects, linked to the subject-matter of the public contract in question. This life cycle costing for the most economically advantageous tenderer was a novelty of Directive 2014/24/EU and is usually regarded as a major step towards a greener procurement reality. Life cycle costing incorporates a holistic approach to costs, going far beyond simple product costs, and includes costs arising before or after purchase, such as maintenance or recycling costs. Interestingly, the concept of life cycle costs is explicitly construed to cover environmental externalities, as long as a monetary value can be attributed to them. They would include the “emissions of greenhouse gases and of other pollutant emissions and other climate change mitigation costs”.Footnote ¹⁶ A notorious problem, however, is left in that the Directive is silent on the methods to be deployed for life cycle costing. As a general rule, contract award criteria must be linked to the subject-matter of a contract. There is no unrestricted freedom of choice for the contracting authority, and methods must provide for verifiability, specificity, and measurability. Moreover, they must be expressly mentioned, together with weighting accorded to each of the criteria.

When it comes to procuring “green”, an environmental characteristic may be a minimum requirement, in which case it should be phrased as a Technical Specification or as a weighted preference, in which case it is an Award Criterion. Minimum levels of performance can equally be set as a Technical Specification, while in the award stage it can be an Award Criterion to which more points are allocated for even better performance surpassing the minimum requirements.

Contract Performance Clauses,Footnote ¹⁷ on the other hand, are specific requirements relating to the performance of a contract at post-award stage. According to the modernised Directives, these could be requirements “intended to favour the implementation of measures for (…) the protection of the environment or animal welfare”,Footnote ¹⁸ and they may therefore be another type of criteria used for greening public contracts.

Overall, however, sustainable procurement remains contested.Footnote ¹⁹ In this respect, the GPP criteria put forward permitted “sustainable” Technical Specifications, Selection Criteria, Award Criteria, and Contract Performance Clauses. For each of these, contracting authorities can choose between “two levels of environmental ambition”, by following core criteria that propose easy, administratively light improvements, while the comprehensive criteria propose environmentally friendly criteria for contracting authorities willing to “go the extra-mile”.

IV Revisions of the Green Public Procurement criteria for food, catering services, and vending machines

The Joint Research Council (JRC) published its 3^rd Technical Report, proposing revisions to the GPP criteria relating to food, which are discussed in greater detail below, as well as those relating to catering servicesFootnote ²⁰ and vending machines.Footnote ²¹ For food procurement, the draft EU GPP criteria relate mainly to Award Criteria and Technical Specifications, measuring percentage values of either volume, or price of food purchased. Thresholds in Technical Specifications are included as minimum values, ie at least X per cent of purchased food must comply with the required specification. Thresholds in Award Criteria are included as the starting point to get points awarded, ie a tender receives more points starting from X per cent of purchased food.

The JRC first identified the main environmental impacts and causes or potential improvement areas in a review of LCA that are currently proposed studiesFootnote ²² and has tried to address these on the basis of the formulation of GPP in the form of the different possible types of tender specifications. Further, the Technical Report provides some examples of the life cycle costing approach.

For food, the latest version of the Technical Report mainly suggests Technical Specifications and Award Criteria, covering organic food products, marine and aquaculture food products, animal welfare (egg and meats), fair and ethical trade products, and environmentally responsible fats. Several proposed GPP categories were removed during the process, namely seasonal products, requirements relating to integrated production, and packaging. The draft GPP criteria further specify contract performance clauses relating to environmentally-friendly procurement management practices, such as specific staff training.

The GPP criteria that are currently proposed are in reality GPP+ in that the criteria attempt to establish their own version of what is “sustainable food” while more or less remaining within the confines of a mandate that is environmental. The ensemble of the categories developed is the result of a highly iterative stakeholder consultation process. The criteria represent, on the one hand, cross-product objectives largely based on certification schemes such as organic or fair and ethical products, and on the other hand product-specific criteria devised specifically for marine and aquaculture products, eggs and meats, and environmentally-responsibly produced fats. The proposed revision of the food GPP criteria often relies on certification schemes, ie a standard that relies on a third party to certify compliance, where the current GPP criteria speak of labels. The revision is based on an environmental “hotspot” analysis by product group, so that the criteria proposed establish more detailed clauses for specific product groups. Also new is the proposal of aspirational goals that at least a specific total amount of purchases should be procured “green”.

Overall this patchwork approach represents a pragmatic, though not theoretically coherent, approach to “greening” the procurement of food.

Organic food could be required as a percentage of purchase, to be calculated either by volume, weight or value. A suggested Technical Specification would be to provide that at least X per cent of the total purchases of food and drink products shall comply with Regulation (EC) No 834/2007, or by an Award Criterion that reads: “Points shall be proportionally awarded to tenders in which more than the required X% of the total purchases of food and drink products have been produced in accordance with Regulation (EC) No 834/2007”. The aspiration for organic purchase is 20–60 per cent by mass or 30–70 per cent by value of the total purchases of food and drinks for the core criteria, or comprehensive >50 per cent by mass or >60 per cent by value of the total purchases of food and drinks.

The Technical Reports recognised that organic food is not in all studies compared favourably to conventional food products, from the environmental perspective, remarking, however, that often life cycle assessment does not capture the positive effects on biodiversity that are to be expected from organic production.Footnote ²³ Organic procurement comes with a – sometimes strong – price premium, depending on the type of product, country and season, ranging from 10–200 per cent.Footnote ²⁴

For marine and aquaculture fish products, the Technical Report suggests a Technical Specification that fish must not be species and stocks “identified in a ‘fish to avoid’ list that reflects the local varieties of fish”. The Technical Report says that the selection of only one list would be recommended, considering the Marine Conservation Society “fish to avoid” list or equivalent lists from WWF’s Sustainable Seafood guides, IUCN, Seaweb Europe, CITES, FAO, NOAA, Monterey Bay Aquarium Seafood Watch, Greenpeace, or other national seafood guides. Another suggested Technical Specification is that at least X per cent of the amount of marine food products purchases “shall have been produced in stocks within safe biological limits addressing environmental impacts including over-fishing or depletion, biodiversity and responsible and sustainable use of the resources. The species purchased must be marked as green in the list coming from the yearly fishing quotas and allowable catches of the European Commission”.Footnote ²⁵ For marine products, therefore, the draft GPP criteria go some way towards setting an independent standard for determining what may or may not be considered environmentally-friendly fish products.

However, also in this group of products, the reliance by contracting authorities on certification schemes is sanctioned in the form of Technical Specifications with a minimum percentage and as an Award Criteria. These may require that aquaculture purchases (excluding organic aquaculture) “shall have been produced meeting the requirements of a certification scheme for sustainable production that is based on multi-stakeholder organisations with a broad membership and addresses environmental impacts including biodiversity and responsible and sustainable use of the resources”. For marine food products, an award criterion is drawn up requiring points to be awarded

Considering criteria that rely on third-party certification schemes, the technical report states that

The requirements concerning animal welfare touch the product group of eggs and to some extent, meat. For eggs, the revision suggests Technical Specifications requiring an amount of the eggs in shell planned to be supplied in the execution of the contract indicating specifically the ones compliant with code 1 or 2 (core criteria) or labelled code 1 (comprehensive criteria) under Regulation (EC) No 589/2008.

The GPP also suggest an Award Criterion that awards points proportionally in which meat and dairy (excluding those that are organic)

The criteria also mention third-party certification schemes that would be likely to comply, namely:

Concerning the horizontal category of fair and ethically traded food products, an Award Criterion may require tenders to stipulate that X per cent of food and drink products have been produced and traded meeting the requirements of a certification scheme for fair and ethical trade that requires a minimum certified content of 90 per cent, that is based on multi-stakeholder organisations with a broad membership and addresses international fair trade standards including working conditions for production in accordance with ILO core conventions,Footnote ²⁸ and sustainable trade and pricing.Footnote ²⁹

Lastly, the Technical Report addresses transfats. Here, a broadening of the criteria has taken place. For pre-packed food and/or drink products containing palm oil, palm kernel oil or their derivatives, or those containing soybeans and or soy oil; as well as for soy and palm oil, sourcing shall be “from plantations that meet the requirements of a certification scheme for sustainable production that is based on multi-stakeholder organisations that has a broad membership, including NGOs, industry and government and that addresses environmental impacts including on soil, biodiversity, land use change, organic carbon stocks and conservation of natural resources”. In these, the GPP refer to schemes such as RSPO, POIG, RTRS or Pro-Terra, which can show compliance with the criterion provided they cover the environmental principles mentioned above. Other schemes at country level can be considered as equivalent as far as they comply with the environmental principles mentioned above.

Overall, only the marine fish product category is setting an independent standard of what may be considered “sustainable marine food”. All other requirements rely on public schemes (organic, eggs) or point out which dimensions should be present in a private certification scheme. Furthermore, some indication is given as to which private standards may be regarded as sufficient. Overall, the GPP criteria demonstrate that in the food industry it remains necessary to have recourse to voluntary schemes in order to address the sustainability dimensions of foodstuffs.

V The Green Public Procurement criteria: green or sustainable food?

Bringing the two policy areas of public procurement and food together in the formulation of GPP criteria for food and catering services at EU level was a daunting task. The disparate nature of procurement policy is heavily aggravated by the fact that food is also regulated through internal market, health, consumer, agriculture, environment, and trade competences, which translates into institutional structures that are equally spread out at the level of EU policy-making. From a legal perspective, Article 11 TFEU would organise these competing demands by mandating that environmental protection requirements are to be integrated into the definition and implementation of Union policies and activities.

One of the main characteristics and original critiquesFootnote ³⁰ of the formulation of EU GPP criteria is their exclusive focus on green criteria, of itself reflecting only the environmental dimension of a potentially much wider sustainability understanding that would include social considerations such as fair trade, or health considerations such as nutrition. This “subject matter” limitation to green issues is a concern, although some of the criteria, in fact, do reflect ethical and social considerations. The entire GPP policy initiative is embedded in a green public procurement context, while one of the main challenges is that foodstuffs have a highly multi-dimensional “sustainability” concept. Other GPP criteria that were developed for goods and services have much purer environmental considerations; in comparison, food is a particularly complex product, in which environmental concerns co-exist with other concerns such as animal welfare, organic production, or social fairness. This complexity already stood in the way of the formulation of EU-Ecolabel criteria for food, which became an abandoned endeavour.Footnote ³¹

The GPP as formulated now clearly go beyond a pure environmental approach in certain aspects. There is attention to animal welfare and socio-ethical considerations, meaning that the GPP criteria now go some way towards aiming for “sustainable” rather than merely “green” food.

Other sustainability dimensions are not addressed in the GPP criteria: health is arguably an important component of “sustainable food”. However, health effects are hardly addressed, for instance there are no criteria relating to healthy products in vending machines. In catering services, there is only a criterion for requiring plant-based options but no consistent attention to it overall.

The proposed revisions are pragmatic, rather than systematic. For instance, Sustainable Public Procurement as opposed to Green Public Procurement would look at a greater number of dimensions than are currently reflected.Footnote ³² A comparison of the “green” dimension of the GPP criteria for food with the environmental criteria shows that the dimensions of sustainability addressed directly through the GPP criteria are rather limited. The comparison also explains why, in food, the reliance on public and private schemes (organic schemes, private schemes relating to socio-economic considerations) is so important. Formal schemes usually comprise a number of dimensions, and therefore provide a shorthand for covering a combination of sustainability variables.

VI The challenges of using certification schemes to determine whether public food purchase is “green”

The GPP criteria act as a kind of voluntary public standard; either in creating substantive criteria, or by referencing private standards. The GPP criteria clearly emphasise that private sustainability schemes remain one of the most significant heuristic devices used in order to be able to determine and verify desirable “green+” requirements of food products.

The legality of referring to voluntary certification schemes in the context of public procurement has become subject to a surprisingly stringent legal framework. Historically, the use of labels in public procurement procedures has been highly contested.Footnote ³³ A Dutch case brought the issue of the legality of requiring specific certification in coffee machines to the European Court of Justice.Footnote ³⁴ Understandably, the reference to a coffee certified by a specific private scheme may give rise to concerns of coffee producers that are certified to a different scheme. To clarify the legal situation of the use of certification schemes in tender specifications, the new Procurement Modernisation Package addressed the issue in Article 43 (in a perhaps confusing terminology, namely “labels”). This possibly reflected the fact that many NGOs had lobbied for a less “technical” understanding of procurement rules in order to facilitate green procurement procedures.Footnote ³⁵

Directive 2014/24/EU defines labels as “any document, certificate or attestation confirming that the works, products, services, processes or procedures in question meet certain requirements”.Footnote ³⁶ The Directive allows contracting authorities to require specific (eco) labels in Technical Specifications, the Award Criteria or the Contract Performance Conditions. However, this is possible only under certain conditions: label requirements may only and exclusively concern criteria that are linked to the subject-matter of the contract.Footnote ³⁷ Where not all requirements are linked to the subject-matter, contracting authorities must refer to the required criteria, and may define technical specifications by reference to particular aspects of the label (Article 43(2)). Additionally, the Directive lists requirements on the governance of labels:Footnote ³⁸ they must be established in an open and transparent procedure in which all relevant stakeholders may participate; must be accessible to all interested parties, and requirements must be set by a third party over which the economic operator applying for the label cannot exercise a decisive influence. Most importantly, contracting authorities requiring a specific label must accept all labels that confirm that the works, supplies or services meet equivalent label requirements.

The GPP criteria for food reflect these requirements to some extent. However, in practice, contracting authorities are incentivised to simply refer to labels, while the question of which requirements are requested for a given tender, and which labels can be regarded as equivalent remains open. From a strictly legal point of view, reference to labels is not that straightforward. On the one hand, the proposed GPP criteria do point out the requirements of labels that are essential to labelling schemes. The GPP criteria also give traction to the “governance requirements” set by the Public Procurement Directives on private schemes. On the other hand, since the GPP criteria are non-binding, contracting authorities may risk seeing these as voluntary specifications, while in reality the Procurement Directives institute legal obligations on how to include labels. Contracting authorities must specify which conditions of a scheme they require, where not all conditions are required. For instance, does the contracting authority want to only buy “green” or also “socially fair”? In addition, any private scheme referred to must fulfil the Directive’s good governance requirements. The final, and perhaps the biggest, difficulty is the question of equivalence. Clearly, there are often discrepancies in the stringency of private schemes’ requirements. Some schemes are more “green” than others. Here, reference to schemes will in practice give rise to a difficult assessment as to which labels are equally green.

VII Conclusions and recommendations

The goal of the GPP criteria for food and catering services is to provide contracting authorities with examples of “green” clauses that could be used in tendering procedures.

The GPP criteria are non-binding, and therefore lack the legal effect of the EU Ecolabel regulations. In this respect it is noteworthy that the GPP are not authored by the European Commission. However, they do create some legal effect in the form of legitimate expectations, and clauses included in the document can presumably be used safely by contracting authorities.

In evaluating the effectiveness of this non-binding policy instrument, it is important that the GPP criteria are embedded in a wider policy initiative that reinforce the “greening” of Member States’ domestic procurement policies. Through this structure, contracting authorities, over time, will probably be incentivised to have more recourse to tender specifications relying on GPP criteria.

While throughout the GPP revision process the scope of the definition of public procurement criteria has been extended, the limitation of the GPP criteria to green issues, as well as the separation from other ongoing policy initiatives relating for instance to life cycle costing are blind angles. If different guidance on how to make procurement “sustainable” co-exists, the effectiveness of different policy instruments could be compromised.

Lastly, the EU Public Procurement Directives set remarkably detailed legal obligations that private schemes have to fulfil when contracting authorities require them. Especially with relation to food, the number of voluntary labelling schemes abounds; some are not certified at all, and some are certified by accredited bodies; some cover a single issue (such as dolphin-safe), while others cover multiple issues (such as UTZ); certainly the requirements between private schemes on the same issue vary greatly. What might be useful, therefore, would be more detailed explanation of how to refer to certification schemes during tender procedures, and how to evaluate the equivalence between schemes.

Overall, it has been shown that the uptake of specific labels by the public sector results in important imitation by the private sector demand.Footnote ³⁹ Although this mechanism may reinforce a principally desirable use of sustainability schemes, competition effects must be safeguarded and mere “greenwashing” of public procurement procedures prevented.