European Commission

How Green is your Public Procurement ?

"Green public procurement means that public purchasers take account of environmental factors when buying products, services or works".
The legal framework
Public procurement in the European Union is - with a few exceptions - subject to Community and international rules. Under these rules public sector procurement must follow transparent procedures ensuring fair conditions of competition for suppliers.
The European Public Procurement Policy
  • creates competitive, non-discriminatory public procurement markets in the European Union
  • ensures value for money for taxpayers and consumers of public services
  • fosters the competitiveness of European suppliers in domestic and world markets
  • covers goods, services and works contracts
  • establishes specific procedures to guarantee a competitive, transparent and non-discriminatory award procedure for procurement contracts above a certain value
EU legislation on green public procurement

EU Directives on Public procurement (31 March 2004)

In 2004, the Council and the European Parliament adopted two directives aimed at clarifying, simplifying and modernising existing European legislation on public procurement.

Directive 2004/18/CE (Consolidated version of 15.09.2008)

Directive 2004/17/CE (Consolidated version of 15.09.2008)

The Directives explain a broad range of issues connected to Green Public Procurement. (The respective elements are clarified in detail in Buying green! A Handbook on environmental public procurement)

For further information on public procurement legislation and relevant documents please consult the SIMAP Website of DG Internal Market.

I) What is needed? - The 'subject matter' and the technical specifications

1) Definition of the 'subject matter': The best and most transparent way of introducing environmental considerations into a public procurement procedure is right at the beginning, when the subject of the purchase is defined.

Example: A contracting authority states in the contract notice that it seeks to buy ecologically grown foodstuff.

2) Definition of technical specifications: This stage describes in detail the requirements of the product, service or work. Contracting authorities can include environmental performance standards and ask for environmental friendly production methods provided that these are apt to define the subject matter of the contract.

Example: Contractors can be asked to supply electricity that, in part or in full, comes from renewable energy sources.

When defining the technical specifications, it is important to consider the environmental impacts throughout the life-cycle of a product or service.

Example: Manufacturing might be environmentally sound, while use and disposal might pose environmental problems.

Technical specifications in terms of performance or functional requirements allow tenderers to come up with new and innovative solutions.

Example: A tender for an environmentally friendly heating system for a building may rather specify a constant day-time temperature than setting detailed and complex technical specifications. This allows suppliers to come up with different options.

The new Public Procurement Directives explicitly state that performance or functional requirements can be taken from specifications of European, international and national eco-labels, provided a series of conditions are met: the criteria have to be appropriate for defining the characteristics of the product, and the eco-label criteria must have been established through stakeholder consultation and on the basis of scientific information and the schemes have to be accessible to everyone (non discriminatory).

Example: A purchasing authority needs to buy copying paper and makes use of the technical specifications for copying paper established for the European eco-labelling scheme EU Flower.

The purchasing authority can decide to recognise the corresponding eco-label as proof of compliance, but it also has to accept other means of proof of compliance with the specifications, such as, for instance, a technical dossier of the manufacturer. Authorities can therefore never require tenderers to be registered under an eco-labelling scheme, because that would be discriminatory.

II) How are suitable tenderers selected? - The exclusion and selection criteria

As a first step, the purchasing authority who wants to purchase a certain product or service, needs to ascertain whether the bidders who are going to reply to the invitation to offer, have the necessary financial and technical competence for performing the contract and haven't been excluded on the basis of a series of limited grounds of exclusion as mentioned in the directives.

The grounds for exclusion relate to the person of the bidder and not to the performance of the contract: they concern for instance its compliance with tax and social security legislation, its good (non criminal) behaviour and so forth. These exclusion criteria offer few possibilities for including an environmental element. Where national law contains provisions to that effect, a purchasing officer could mention that will be excluded bidders who have been convicted by a final judgment (or a decision having equivalent effect) for non compliance with environmental legislation when exercising their profession.

The proper selection criteria on the other hand, which are aimed at assessing the financial and technical capacity of bidders, can also include requirements related to the capacity to execute a contract which includes consideration of certain environmental requirements.

Example: Authorities awarding a waste treatment contract can insist that bidders demonstrate their capacity to use environmentally sound waste treatment methods.

In certain service or works contracts, the contracting authority can even ask from bidders that they demonstrate their capacity to apply environmental management measures for the duration of a service contract. In such cases, registration under the EU's Eco-Management and Audit Scheme (EMAS), or under a comparable environmental management scheme (for example EN/ISO 14001), should be recognised as sufficient proof of compliance. However, registration under an environmental management schemes is not the only possible means of proof, contracting authorities shall also accept other evidence of equivalent environmental management measures from economic operators.

However, this possibility does not exist for supply contracts, because for supply contracts, the performance of the contract is limited to the supply of the goods, which in principle does not involve any environmental management measures. Registration under an environmental management scheme may say something about the general environmental performance of the company, but not necessarily about the environmentally sound characteristics of the products that are the subject of the tender.

III) How is the bid offering the 'best value for money' selected? - The award criteria

Either a purchasing officer can choose the bid offering the lowest price, either he can choose 'the economically most advantageous offer'. In the latter case, he will apply a series of award criteria, including the price, which will allow him to choose the bid offering best value for money. The criteria against which the value will be measured may contain environmental sub-criteria. This enables contracting authorities to integrate environmental aspects even in this last stage of the procurement process.

Award criteria have to be clear and objectively verifiable. This precondition enables bidders to present balanced offers and allows contracting authorities to verify and compare bids on an objective basis.

Example: A contracting authority purchasing electricity may award extra points to a bidder who is able to prove that 20 % of the electricity supplied is from renewable energy sources.

IV) How can an environmentally sound execution of the contract be assured? - Performance clauses

Performance clauses of a contract may also include environmental considerations. Acceptable environmental clauses must be non-discriminatory, objectively verifiable, and must not be disguised technical specifications or selection criteria. They also have to be known to bidders from in the beginning of the procurement procedure, and all bidders should in principle be able to comply with them after conclusion of the contract.

Bad example: It would not be permissible to ask the successful bidder to be registered under an environmental management scheme, because such registration would take a very long time. Not all bidders would, at the time of the offer and conclusion of the contract, be able to comply with that requirement.

Good example: One possible environmental contract clause might be to ask that the successful bidder transports the goods supplied by rail and not by truck.

Interpretative Communication (July 2001)

The Interpretative Communication of the European Commission, which dates from before the adoption of the new legal framework, clarified how former Community law offered numerous possibilities to public purchasers who wish to integrate environmental considerations into public procurement procedures. As the former legal framework did not contain any reference to environmental requirements, the Communication explained how environmental concerns may be taken into account at each separate stage of the contract award procedure. Although 'overruled' by the new public procurement directives, the Communication may still be of interest and offer guidance on certain aspects, for instance on the possibility of asking from bidders to demonstrate their capacity to take environmental management measures during the performance of the contract.

Full text of the interpretative communication:

Press release:

International legal
framework (GPA)

A Government Procurement Agreement has been signed in the framework of the World Trade Organisation (WTO). It is a so-called plurilateral agreement, characterised by a narrower group of signatories than general WTO agreements.

The GPA itself does not contain any reference to environmental protection. However, the Sixth Recital of the Preamble to the WTO Agreement recognises the need to act in accordance with the principle of sustainable development and to protect and preserve the environment. Therefore it is broadly accepted that the GPA allows contracting entities to take into account environmental considerations when defining technical specifications (including process and production methods) and selection and award criteria, on condition that they are not discriminatory, and are sufficiently objective and verifiable.


Jurisprudence of the
Court of Justice

In the field of Green Public Procurement, the Court of Justice has issued two important rulings:

1. The 'Helsinki Bus' case (Case C-513/99 of 17 September 2002)

The origin of this case was the disputed award of a contract for renewing the bus network of Helsinki. The Court had to answer one main question: To what extent can environmental requirements be taken into consideration at the award stage of a contract and extra points awarded for them?

The Court confirmed the possibility of taking into consideration environmental award criteria when assessing the most economically advantageous tender. But the Court put four conditions to the use of such criteria:

  • they should be linked to the subject matter of the contract;
  • they should not give unrestricted freedom of choice on the contracting authority, meaning any environmental requirements must be specific and objectively quantifiable;
  • they should be expressly mentioned in the contract documents or in the tender notice; and
  • they have to comply with the general EC Treaty principles.

2. The 'Wienstrom' case (Case C-448/01 of 4 December 2003)

The disputed tender documents specified that bidders should supply electricity stemming from renewable energy sources, meaning bidders had to prove that they had disposed or would dispose per year of a minimum amount of electricity from renewable energy sources equivalent to the estimated annual consumption of the federal services.

In conclusion the Court's decision confirms that

  • it is acceptable to make use of ecological award criteria, even if it doesn't provide an immediate economic benefit for the contracting authority;
  • it is furthermore possible to give an important weighting to such criteria;
  • it is clearly admissible to establish an award criterion which is related to the production method of the purchased product, if relevant for the product;
  • in order for the criterion to be acceptable, it should be expressly linked to the object of the purchase contract and should be susceptible of control, which would imply that the contracting authority requires - through the production of certificates for example - elements enabling him to control the information forwarded by the bidders in relation to the award criteria.
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