GreenLabelsPurchase. GreenLabelsPurchase. Final Publishable Report. August making a greener procurement with energy labels

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1 GreenLabelsPurchase making a greener procurement with energy labels GreenLabelsPurchase Final Publishable Report August 2008 Supported by

2 This report is provided within the framework of the European project GreenLabels- Purchase making a greener procurement with energy labels funded by the programme Intelligent Energy Europe. Publisher: Berliner Energieagentur GmbH Französische Straße 23, Berlin office@berliner-e-agentur.de Internet: Content development: Berliner Energieagentur Date: August 2008 Disclaimer: The sole responsibility for the content of this report lies with the authors. It does not represent the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein. If not differently designated, the copyright for contents, diagrams and texts holds the Berliner Energieagentur. 2

3 Content Overview GreenLabelsPurchase 4 Executive Summary 5 1. Introduction Green Procurement General Framework Legal Aspects of public procurement National Procurement Standards Labels Support for Purchasers Guidance for Procurement Professionals Calculation of Life Cycle Costs Green Procurement in Practice Institutional Purchasing Policies Making Green Procurement happen Greening Procurement in Public Administrations Greening Procurement in Private Businesses Conclusions and Recommendations Obstacles for Green Procurement How can these Barriers be overcome? Outlook Contacts 77 3

4 Overview GreenLabelsPurchase Programme area: Co-ordinator: Website: STEER Berliner Energieagentur GmbH, Germany Duration: January 2006 June 2008 Budget: Euro (EU contribution %) Project Consortium : Germany: BEA Finland: Motiva B.&S.U. Efeko Poland: KAPE Austria: O.Ö. Energiesparverband Italy: ENEA Bulgaria: EnEffect Slovenia: ZRMK Hungary: BUTE Latvia: Ekodoma CES 4

5 Executive Summary The objective to strengthen the environmentally friendly procurement of products and services is on the European political agenda since several years. Especially the huge energy saving potential that could be realised through stringent procurement devices with low energy consumption by public and private institutions stands in the centre of attention. Due to the special legal requirements for public procurement, initiatives to boost green procurement have so far put a strong focus on the public sector. But with rising energy prices, strategies to enhance the purchase of economic devices and products are becoming more interesting also for the private sector. In the framework of the European Project GreenLabelsPurchase making a greener procurement with energy labels which was coordinated by Berliner Energieagentur GmbH (BEA) between January 2006 and June 2008, both public and private institutions have been addressed and consulted to realise the economic potentials of green procurement. Political and Economic Setting The public interest on the topic of green procurement has clearly increased during the project period. Beyond the direct effects of the project activities, which will be laid out later, external factors also played a role: On the European as well as on the national levels political conditions have lately been defined, which promote the procurement of energy efficient products especially for public institutions. The directive for energy end-use efficiency and energy services (2006/32/EC), through which the EU member states aim at achieving energy savings of 9 % until 2017, plays a major role in the promotion of green procurement. The directive defines the public sector as a front runner for energy efficiency. The objective to enhance the procurement of energy efficient products is stated explicitly in the directive 1. A central part of the directive 2006/32/EC is the 1 A further European legislation to promote the procurement of energy efficient products is the new Energy Star regulation (No 106/2008) of January 2008, which requires European and national public procurement departments to use the Energy Star criteria as minimum criteria when purchasing office appliances. In December 2007, a draft for a directive to promote clean and energy efficient street vehicles, which requires public institutions to consider environmental and efficiency criteria when procuring vehicles, was introduced (KOM(2007) 817). 5

6 preparation of national energy efficiency action plans which often contain requirements on green procurement. Another factor for increased interest in green procurement are the rising energy prices, leading to a higher demand for energy efficient products and services. By taking into account the life cycle costs of a product, the cost effectiveness of low consumption devices clearly improves. Project implementation and results In this general setting the objective of the project GreenLabelsPurchase was to support the use of energy and environmental criteria defined in well-accepted labels in the procurement processes of public and private institutions. A central instrument for the consultation of professional purchasers is the project website with the procurement guidelines and the technical modules, which have been developed in the project. For the product groups IT, lighting, household appliances, vehicles, building components, and green power, guidelines with performance sheets and calculation tools can be downloaded free of charge from the project website. The criteria used in the guidelines are taken from well-established energy and environmental labels. Further assistance for procurement departments is provided by the good practice database of successful green procurement actions of public and private purchasing bodies. Building on the developed tools the main aim of the project was to initiate and support pilot projects using the material and/or applying the criteria developed in GreenLabelsPurchase. After initial difficulties to attract the attention of the purchasing institutions, the interest rose over the project period. The pilot projects include well-known institutions like the German KfW Bankengruppe (procurement of 100 % green power) as well as local communities, universities and private businesses. Parallel to initiating pilot projects, the promotion of the established green procurement standards was an important issue. These activities included personal consultations, in-house workshops and presentations on thematically related events. The activities to disseminate the project were very successful. The topics most asked for in the consultations were IT, clean vehicles and building components. The consultations showed that the developed criteria were also of interest for manufacturers and multipliers. The Volkswagen AG inquired the project group 6

7 about the criteria concerning CO 2 emissions in the different car segments, which have been elaborated in the course of the project. This new development was necessary, since to date such criteria for cars are not available anywhere, although the discussion about target values has been on the political agenda for quite some time. These criteria were then also taken over into the European Commission s Green Public Procurement Training Toolkit 2. This underlines, that in absence of established benchmarks for vehicles a gap could be closed and the discussion could be advanced by the project. Another topic was the development and dissemination of text modules that can be integrated in institutional procurement policies to sustainably implement green procurement standards. This was also accomplished successfully: The Berlin Senate instructed 2007 all public procurement departments in Berlin to use the criteria for vehicles, which were developed in GreenLabelsPurchase. The magistrate of the city of Bremerhaven decided on the 25th of June to use the tools of the project GreenLabelsPurchase for their procurements in the future. Through extensive public relations activities, the contents and results of the project were widely disseminated. Barriers The acceptance of environmentally friendly procurement by responsible procurers in public as well as in private institutions is rising, but with different impetus in the different regions of Europe. While in some central European countries there is already a good level of knowledge an interest in green procurement, this concept is still largely uncommon in some of the new member states. In many cases mainly in public authorities insecurities about legal aspects and the practical implementation of green procurement are still strong. Further barriers are the lack of knowledge that with energy efficient procurement costs can be saved over the life cycle of the products, even if the purchasing price may be higher. Another bottleneck is the lack of environmental policies in many companies and public departments. Finally, for certain products, there are no or only niche markets in some parts of Europe, making green procurement almost impossible for these products

8 How can these barriers be overcome? The experiences in GreenLabelsPurchase suggest, that a well-balanced mix of further developed legal requirements and information and consultation offers in the sense of a push and pull strategy should be followed. On the legal side there are the directive for energy end-use efficiency and energy services (2006/32/EC) and the directive 2005/32/EC on Energy-using Products (EuP). Both define a framework which will strongly influence the European procurement praxis. One focus of the Energy Service Directive lies in assigning a frontrunner role to the public sector. This approach is also reflected in further European legislation like the new Energy Star Regulation and the planned directive to promote clean and energy efficient street vehicles (KOM(2007) 817). However, complementary consultation offers with a special focus on life cycle cost assessment are necessary to successfully implement these requirements in praxis. With the EuP directive appliances of several product groups which do not meet defined minimum requirements will be banned from the European markets. Furthermore the European labelling system for energy efficient products will be adapted and extended fundamentally. This will have a significant impact on the procurement praxis of purchasing departments. These changes have to be integrated into the procurement tools. Professional procurers will have to be trained and informed about the new developments. Especially in the private sector costs are likely to increase in the future due to rising energy prices. Besides that the upcoming legal changes are the main incentive to change to energy efficient procurement praxis. Here as well, it is necessary to offer respective assistance to private sector institutions. Key Results The procurement standards still differ largely in the participating countries: Especially in Eastern Europe green procurement is still relatively uncommon. It is widespread to only consider the lowest price in tender procedures. In some western European countries the relevance of green procurement is increasing fast. However, green procurement with a focus on energy efficiency (and the related product groups as chosen in this action) is less common than the green procurement of paper or room cleaning detergents. 8

9 Most purchasers have their consolidated institutional purchasing procedures, which can often not easily be adapted. Therefore, several institutions expressed a great interest in the green criteria developed by GreenLabelsPurchase for the product groups covered. Often, these criteria were used in tendering procedures. However, a switch to using the tendering and purchasing tools of GreenLabelsPurchase was not always wanted. Purchasers need support and training in the use of green criteria and about legal aspects of green procurement. They also need assistance with the practical implementation of green procurement, e.g. the concept of life cycle costs (LCC), which is still not well-known today and which needs to be well explained. This means that green procurement can lead to additional workload for the procurers, at least in the introductory phase. The responsibility for the purchasing costs and the running costs is often still shared between different departments in public administrations, which impedes the implementation of life cycle assessments. In the course of the project GreenLabelsPurchase, the consortium informed decision makers about green procurement, provided 800 initial consultations, performed 100 in-house sessions, trained 420 multipliers, published 120 goodpractices on green procurement, presented the project on 91 events and coached 46 green procurement pilot projects, which resulted in CO 2 savings of t/a. Next Steps The voluntary use of information and consultation offers by institutions this is one of the main project conclusions takes a certain start-up time, but then they are accepted with growing interest. This potential is not completely exploited yet, in some countries it is only marginally developed. Therefore, the elaborated materials should be enhanced and distributed on a larger scale in the future, ideally together with strategic partners like professional e-procurement platforms. The instruments and criteria compiled in the project GreenLabelsPurchase are necessary and successful to accompany and complement the legal requirements for a more and more green procurement. 9

10 1. Introduction The objective to strengthen the environmentally friendly procurement of products and services is on the European political agenda since several years. Especially the huge energy saving potential that could be realised through stringent procurement devices with low energy consumption by public and private institutions stands in the centre of attention. Due to the special legal requirements for public procurement, initiatives to boost green procurement have so far put a strong focus on the public sector. But with rising energy prices, strategies to enhance the purchase of economic devices and products are becoming more interesting also for the private sector. Other current European projects concerned with green procurement of several product groups are Procura+ and ProEE. However, both projects are only targeted towards public purchasers. In the framework of the European Project GreenLabelsPurchase making a greener procurement with energy labels which was coordinated by Berliner Energieagentur GmbH (BEA) between January 2006 and June 2008, both public and private institutions were consulted about green procurement. Project implementation and results In this general setting the objective of the project GreenLabelsPurchase was to support the use of energy and environmental criteria defined in well-accepted labels in the procurement processes of public and private institutions. A central instrument for the consultation of professional purchasers is the project website with the procurement guidelines and the technical modules, which have been developed in the project. For the product groups IT, lighting, household appliances, vehicles, building components, and green power, guidelines with performance sheets and calculation tools can be downloaded free of charge from the project website. The criteria used in the guidelines are taken from well-established energy and environmental labels. Further assistance for procurement departments is provided by the good practice database of successful green procurement actions of public and private purchasing bodies. 10

11 Building on the developed tools the main aim of the project was to initiate and support pilot projects using the material and/or applying the criteria developed in GreenLabelsPurchase. After initial difficulties to attract the attention of the purchasing institutions, the interest rose over the project period. The pilot projects include well-known institutions like the German KfW Bankengruppe (procurement of 100 % green power) as well as local communities, universities and private businesses. Parallel to initiating pilot projects, the promotion of the established green procurement standards was an important issue. These activities included personal consultations, in-house workshops and presentations on thematically related events. The activities to disseminate the project were very successful. The topics most asked for in the consultations were IT, clean vehicles and building components. The consultations showed that the developed criteria were also of interest for manufacturers and multipliers. The Volkswagen AG inquired the project group about the criteria concerning CO 2 emissions in the different car segments, which have been elaborated in the course of the project. This new development was necessary, since to date such criteria for cars are not available anywhere, although the discussion about target values has been on the political agenda for quite some time. These criteria were then also taken over into the European Commission s Green Public Procurement Training Toolkit 3. This underlines, that in absence of established benchmarks for vehicles a gap could be closed and the discussion could be advanced by the project. Another topic was the development and dissemination of text modules that can be integrated in institutional procurement policies to sustainably implement green procurement standards. This was also accomplished successfully: The Berlin Senate instructed 2007 all public procurement departments in Berlin to use the criteria for vehicles, which were developed in GreenLabelsPurchase. The magistrate of the city of Bremerhaven decided on the 25th of June to use the tools of the project GreenLabelsPurchase for their procurements in the future. Through extensive public relations activities, the contents and results of the project were widely disseminated

12 2. Green Procurement Procurement has the power to help move eco-products into mainstream. Thus, it gives producers real incentives to pursue innovative solutions. This way, the development and everyday use of more environmentally-friendly technologies can be stimulated by procurement. Public purchasing alone amounts to 16 % of the EU gross domestic product (GDP). In some product, works and service sectors, the impact can be particularly significant, as public purchasers command a large share of the market (e.g. in IT equipment, energy-efficient building components, lighting). In the research project RELIEF, which was co-funded by the European Commission the project, the potential environmental benefits of a wide adoption of green public procurement across the EU was assessed. 4 The findings produced the following conclusions. If all public authorities all over the EU would buy green electricity, this would lead to CO 2 savings of about 60 million tonnes, which is equivalent to 18 % of the EU s greenhouse gas reduction commitment under the Kyoto Protocol. Nearly the same saving could be achieved if public authorities opted for buildings of high environmental quality. If one considers life cycle costs of goods and services, green procurement allows one to save money and protect the environment at the same time. Purchasing influences directly the use of materials, energy, the production of waste and pollution. An in the positive case, it can boost sustainable patterns of consumption and behaviour. 2.1 General Framework The public interest on the topic of green procurement has clearly increased during the project period. Beyond the direct effects of the project activities external factors also played a role. The European legislative framework plays an important role. European policies are aiming at opening up national markets to competition from other member states, based on transparent and competitive procurement rules. This ensures value for money for taxpayers and efficient allocation of resources, 4 Further support for green public procurement is being provided by the European Commission via the guideline Buying green! A handbook on environmental public procurement, , Sec (2004) 1050, the website and the Green Public Procurement Training Toolkit. 12

13 thereby enhancing the quality of public services. Furthermore, it improves economic growth, competitiveness and job creation. On the European as well as on the national levels political conditions are being defined, which promote green procurement of energy efficient products especially for public procurement departments. The potential of green public procurement as a policy instrument has been increasingly recognised, and over recent years there has been growing political commitment at national, EU and international level. In 2002, the OECD adopted a recommendation on green public procurement. As a follow-up to the Johannesburg World Summit on Sustainable Development (September 2002), the Marrakech Task force on sustainable procurement was created with the aim of spreading sustainable (green) public procurement practices. Sustainable procurement policies have been launched in many OECD countries (USA, Japan, Canada, Australia, and South Korea) as well as in emerging countries (such as China, Thailand, and Philippines). Within the EU, the potential of green public procurement was first highlighted in the 2003 Commission Communication on Integrated Product Policy where member states were asked to adopt national action plans for green public procurement by the end of The new European legal framework for public procurement has clarified how public purchasers can include environmental considerations in their procurement processes and procedures. The renewed EU Sustainable Development Strategy (June 2006), set the policy objective for 2010 of bringing the average level of EU green public procurement up to the standard achieved by the best performing member states in This communication is part of the Action Plan on Sustainable Consumption and Production and Sustainable Industrial Policy, which establishes a framework for the integrated implementation of a mix of instruments aimed at improving the energy and environmental performances of products. The directive for energy end-use efficiency and energy services (2006/32/EC), through which the EU member states aim at achieving energy savings of 9 % until 2017, plays a major role in the promotion of green procurement. The directive defines the public sector as a front runner for energy efficiency. The objective to enhance the procurement of energy efficient products is stated explicitly in the directive. A central part of the directive 2006/32/EC is the preparation of national energy efficiency action plans which often contain requirements on green procurement. 13

14 Another factor for increased interest in green procurement are the rising energy prices, leading to a higher demand for energy efficient products and services. By taking into account the life cycle costs of a product, the cost effectiveness of low consumption devices clearly improves. 2.2 Legal Aspects of public procurement While for private purchasers no obligations exist, public purchasers have to follow strict legal rules. In 2004, the Council and the European Parliament adopted the directives 2004/18/EC and 2004/17/EC that aimed at clarifying, simplifying and modernising existing European legislation on public procurement. The directives only apply to public procurement contracts that exceed fixed thresholds ( Euro for products and services). They deepen the opportunities for adopting environmental considerations in the technical specifications, award criteria and also contract performance clauses for public procurement. All legal principles like equal treatment, transparency, as well as free movement of goods have to be fulfilled. An Interpretative Communication of the European Commission of July 2001, which was before the adoption of the new legal framework, clarified how former Community law offered numerous possibilities to public purchasers who wished 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. 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 can extra points awarded for them? 14

15 The court confirmed the possibility of taking into consideration environmental awarding 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 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 does not 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 to control the information forwarded by the bidders in relation to the award criteria. 15

16 2.3 National Procurement Standards Several front-running member states in the field of green public procurement have set ambitious targets: the Dutch government has set a 100 % Sustainable Procurement target to be reached by 2010; the Austrian Government has identified different targets to be met by 2010 for 5 product groups: IT: 95 %, electricity: 80 %, paper: 30 %, cleaning products: 95 %, vehicles: 20 %. In France, 20 % of total annual renewal of vehicles purchased by central government should consist of "clean" vehicles, 20 % of new constructions should be compliant with the HQE16 standards or equivalent and 50 % of all wood products should be legally sourced and sustainable by In the UK, the Sustainable Procurement Action Plan is closely linked to a series of sustainable operations targets for the Government office estate, including a pledge to go carbon neutral by 2012 and to reduce carbon emissions by 30 % by In an assessment among the participating countries of GreenLabelsPurchase, it became clear that there is no developed green market for all project relevant product groups in all of the project partners countries. Often only a niche market exists for green products in the project relevant product groups, sometimes no market all all. Green Market Office Equipment Lighting Niche Market YES NO Household Appliances Niche Market YES NO Green Electricity Niche Market YES NO Niche Market YES Building Components Vehicles Niche Market YES NO YES NO NO County Upper Austria X X X X X X Bulgaria X X X X X X Finland X X X X X X Germany X X X X X X Hungary X X X X X X Italy X X X X X X X Latvia X X X X X X Poland X X X X X X Slovenia X X X X X X Niche Market The table gives a very heterogeneous picture on existing green markets in the project relevant product groups. Especially the assessment of the product group office equipment states out that only a niche market is established in the depicted countries, despite the fact that the EU Energy Star label exists as energy consumption related label well known in Europe. Therefore, this appraisal might not be completely true on the factual level, but it clearly reflects the perception of the market situation, as it is probably also seen by the majority of procurers. The market for 16

17 household appliances is seen as the most developed green market in the participating countries, certainly because of the high visibility of the European energy label for household appliances. For green electricity in four countries and for building components in three countries no green market has been developed until today. In the following, an overview on the procurement standards in the countries of the GreenLabelsPurchase is given: Germany In Germany a common legal procurement standard exists for public procurement. Below the threshold values mentioned in the EC Directives the procurement procedures are laid down in the German competition law, the contracting rules for awarding public services and works and the law on budgetary funds. For procurement procedures, the fourth chapter of the competition law (law against distortion of competition), the award ordinance (Vergabeverordnung VgV) and contracting rules for awarding public services and works (Verdingungsordnungen VOL/A and VOL/B) are most important. Germany has not completely transposed the Directives 2004/18/EC and 2004/17/EC into German law. Nevertheless, the German Ministry of Economics and Technology published for each Directive separately a circular letter. This circular letter explains the procurement rules. Responsible persons of ministries and public administrations should consider these explanations when publishing tenders containing threshold values that are above the threshold values mentioned in the EC Directives. The process of adopting the Directive 2004/18/EC and 2004/17/EC into German law is still ongoing but should be finished soon with passing of the new tendering law. The law offers public contractors the possibility to procure environmentally friendly products. Additionally, specified environmentally beneficial production procedures (like EMAS) can be defined as a precondition in the procurement of goods. In January 2008 an order of the Ministry of Economics was released that requires federal public departments to consider energy efficiency when purchasing products or services. In Germany, the procurement personnel in public administrations prepare the documents for the tendering process. The procurement procedure does not differ in principle whether criteria for environmentally friendly goods are included in the tender documents or not. If an administration wants to consider environmentally 17

18 criteria for goods or services, it has to set out the criteria very clearly in the tender documents. It is necessary to avoid discrimination of products or goods or suppliers from abroad. Depending on the threshold values mentioned in the Directives and respectively in the German ordinances there is a difference whether the tender documents are published in a national official journal, the European official journal or if it is necessary to publish the tender documents in a public journal at all Austria In December 2005, a new law for public procurement, the "Bundesvergabegesetz 2006" was enacted in Austria to implement the directives 2004/18/EG and 2004/14/EG of the European Parliament. The law provides a legal framework for public procurement for authorised and reliable companies for prices that are in line with the market, to guarantee an efficient and transparent use of public money and to avoid wasting of funds, corruption, misuse and fraud and to make possible a fair competition. The law includes new procedures and a reorganisation of the procurement standards in sectors like gas, heat or electricity, water, traffic, ports and airports and mailing services. The "Bundesvergabegesetz 2006" regulates in which cases a "procurement procedure" has to be made (for example how much money will be spent for the order etc.) and which type of procurement procedure has to be used (e.g. open or non-open procedure) and also how the procedures of public procurement have to be organised. No public tender has to be made, if the order value is less than Euro (in the above-mentioned sectors less than Euro). In this case, the order can be made directly. Public procurement is controlled on national level by the office for public procurement of the national government and on the level of the regions and municipalities by an autonomous senate Finland There is a law concerning public procurement in Finland. The national legislation on public procurement is being processed in the Finnish Parliament as the implementation measure of the EU Directives on Public Procurement. There is no obligation for green purchasing in Finland. However, the possibility to use environmental aspects as award criteria has been explicitly expressed in The Regulation on State Purchasing of

19 The Ministry of Trade and Industry has concluded voluntary Energy Conservation Agreements with public and private sector actors covering most of the end-use of energy in Finland. The agreements with the public sector parties include procurement criteria emphasizing high energy efficiency. As the agreement system has been revised in 2006 the requirements concerning energy efficiency will be more specific and get more weight. A few Finnish municipalities explored the supply of green products and studied the link between purchasing and environmental loads already at the end of the 1980 s. The report State material purchasing and environment drawn up by a working party set up by the Ministry of the Environment in 1992 included 53 proposals but resulted in no further action. After this, green public procurement attracted more interest again in 1998 when the Government program stated that environmental considerations should be considered in public purchasing. Finland produced reports on the state of green public procurement and the development of an internetbased information-system, began. Hymonet has been in use since the summer of 2001 and it includes product-specific information and guidelines for over 60 different product groups and product-specific environmental questions in attachments that can be used with tender calls. In Finland there is a public procurement advisory unit, which supports purchasing although they do not have specific experience with green purchasing. The Ministry of Trade and Industry (MTI) has published recommendations on energy efficiency in public procurement (in 2000). The recommendations will be updated in The national action plan for sustainable procurement has just been published by the working group (the consortium partners Motiva and FCG Efeko participated in the work). At the moment there are no compulsory requirements, the development work is done on a voluntary basis. There are different voluntary programs, agreements as energy efficiency agreements, training etc. that organisations can make use of. In the future there may even be (compulsory) regulations/legislation concerning green procurements. The national action plan for sustainable procurements includes new recommendations. The Voluntary Energy efficiency agreements may be the world s most extensive. Procurement is one of the key issues in the implementation of the agreement. Nearly 40 % of Finnish municipalities have already signed the agreement. 19

20 2.3.4 Italy In Italy it is estimated that the value of public procurements represents about 17 % of the GDP. Specific legislation on green public procurement is presently under preparation (the implementation of the EU directive is on-going and the scheme of the relevant Decree has been approved). To date, there is a preliminary approval of the Codice Unico degli Appalti by the Council of Ministers, implementing inter alia directive 2004/18/EC and establishing rules for all public contracts. Current national practice in procurement The local/central Authorities are important customers in many markets. As a rule (applicable to both the public and the private sectors) the cheapest supplier is awarded the contract for large purchases, which makes it difficult for innovative or green products, usually more expensive, to be purchased. However, since 2000 actions on green (public) procurement were put in place by local administrations. Public Administration, unlike the private sector, must follow laws and rules aimed at transparency (through the use of standardised procedures avoiding subjective decisions) and fair competition (access to procurement schemes to national and international companies). Green criteria can be added as threshold requirements, when the contract is awarded to the most economic advantageous offer. In the case a score system is used, with specific points assigned to the environmental quality, only products fulfilling the specific green characteristics (i.e.: energy consumption, end of life collection, recycle and disposal) are awarded with the points. A combination of the two methods is also possible. As result of the overall legislative framework, the start-up phase of the centralisation of the public purchase lead to significant savings: 2,3 billion Euro in 2002 compared to 2001, with an average saving of 27% on purchasing price, going from 81% for mobile telephony, 68% for fixed one, 35% for Laptops, 32% for photocopiers, 10-20% for fuels, 15% for vehicles and stationery and 9% for food coupons. In 2002, of the 97 billion Euro were spent by PA for purchasing of goods and services, 8 billion Euro were managed by CONSIP. The CONSIP s role developed from purchasing centre for Ministries and PA to a strategic centre for public expenses co-ordination and rationalisation and started to introduce green procurement procedures. Similar purchasing centres have been established or are setting up at Regional level. 20

21 More recently with the publication of the National Action Plan on GPP green procurement is becoming mandatory for a list of product categories with a set of minimum targets to be achieved by PA and Public Bodies. A survey about the green public procurement knowledge developed by the Italian Ministry for the Environment on a sample of 215 Local Administrations (municipalities and provinces) by population, resulted in: In general, most of the available examples are referred to the purchase of specific products: the review developed by Ecosistema Urbano 2001 among all principal towns in the Italian provinces resulted in 55 % of the municipalities purchasing recycled papers (but less than 10% of the municipalities for an amount larger that the half of the needs), 40 % using biologic products in canteens and 40 % taking the EU energy label into consideration when buying lighting products. However, experiences of a co-ordinated and integrated green procurement are rare Slovenia The implementation of EU Directives, 2004/18/EC and 2004/17/EC represented the framework and basis for the recent amendment of the legislation. In December 2006 a new Public Procurement Act (ZJN-2), harmonized with the EU legislation, was promulgated. For the first time energy and environmental criteria are explicitly brought forward, not as an obligation, but as a (recommended) possibility in contract award procedures. The Act introduces terms such as environmental protection, environmental characteristics, and similar. Criteria from different green labelling schemes can be included in the tender documents and taken into account when assessing economically most viable offers. There are no major obstacles for introduction of regular green procurement practice. As explained above, national legislation now presents legal groundwork and thus encourages green procurement. The success of the new Act bringing forward 21

22 the green issues depends also on accompanying activities, especially promotion, qualification, various incentives, and also on wide dissemination of good practice examples as role models. Some more obvious obstacles in this process are probably lack of relevant trained personnel responsible for work on procurement, tendering, etc., lack of detailed and consistent / standardised (green) criteria, and lack of tools. In the private sector the situation depends also on the internal company policy and strategies. It can be said that in some cases (certain types of equipment etc.) green procurement is executed fortuitously, without specific previous definition of selection criteria. In certain areas, like new construction and refurbishment of existent buildings, technical regulation itself favours green issues through specifications for materials, constructions, energy demand etc. Many investors and owners have in the past opted for obtaining pilot energy certificates as a proof of energyand environmental quality. The present situation shows good potentials for implementation of further similar activities to achieve a positive change of current practice and noticeable results both in the private and public sector. Several national strategic documents now exist, which address reduction of energy consumption, protection of climate and environment, and reduction of GHG emissions. The national action plan on energy efficiency aims at a 9% reduction of final energy demand. The Government has recently announced plans for shaping a set of activities to be performed in the near future regarding the green procurement practice. This includes: an analysis of current situation (most often purchased products, products with the largest environmental impact, existent criteria, experience from other countries); wide distribution of the Buying Green handbook (EC), translated and available in Slovenian language from 2005; composition of an operational programme for initiation of green public procurement in Slovenia (definition of goals, definition of criteria, education of personnel responsible for procurement, activation of a part of the CO 2 tax as an incentive for municipalities to organize green calls for tender, gradual introduction of environmental management in public administration). Incentives for sustainable consumption and protection are included in the resolution on National programme for environmental protection In September 2007 the EU conference on sustainable consumption and production took place in Ljubljana. In 2008 it is planned that the National council for sustainable development will address the topics of sustainable consumption and production in detail. 22

23 The government has recently formed a working group for green public procurement, which has to prepare several topical programmes, including the operational programme for green public procurement Latvia The new version of Public Procurement law is in force since May 1, 2006 and fully complies with new EU procurement directives 18/2004/EC and 17/2004/EC. The new version of the law is favourable towards green procurement, but it also states that environmental criteria can be used on voluntary basis, which leads to situation that they are not often used Bulgaria The energy efficiency policy of Bulgaria is based on the national priorities and is in conformity with the new positive sustainable policy and economic trends, as well as with the requirements of the European directives and market-based economic principles. The main energy efficiency policy instruments are the Energy Strategy from 2002; the Energy Act adopted in 2003; the Energy Efficiency Act, adopted in March 2004 and the National long term energy efficiency program till Until today there isn't any program targeted towards energy efficiency appliances and procurement, though the government officials are generally aware of the usefulness in the development of such activities. The harmonization of the Bulgarian with the European legislative framework in the field of appliances has been conducted through the introduction of the European acts of the acquis communautaire by the Law on Technical Requirements with Respect to Products and the Law on Consumer Protection. An Ordinance concerning the requirements for labeling of appliances with respect to their consumption of energy and other resources has been worked out by the Ministry of Economy (currently Ministry of Economy and Energy) and has been in force as of September 1 st The Ordinance transposes in full the requirements of the Framework Directive and all implementing Directives. The Law on Technical Requirements with respect to products lays down the provisions for determination of the most substantial requirements concerning the products sold on the local market and the procedures for performing the assessment compliance and market supervision. Directives 96/57/EEC, 92/42/EEC and 2000/55/EEC are transposed by virtue of sub law ordinances. All market players have shown fairly high level of awareness of the existence of Bulgarian legislation related to the relevant national and EU standards. It is the 23

24 same for manufacturers, importers and retailers. Contrary to that most of them do not comply with the existing legislation and labels are still not very often present in the selling points and they are not part of the procurement procedures. All retailers explicitly support the introduction of energy efficient products, especially in the home appliances segment but this is not a component of the procurement policy. However, in none of the retailers chains special training is provided for the salespeople, especially for the energy efficiency labels and characteristics of the appliance sold, neither are those standards widely promoted in the procurement procedures Poland In January 2007 the National Implementation Plan for Green Procurement for the years was adopted. This document defines precisely a time schedule and a set of activities as well as institutional responsibility for implementing green procurement. Until 2008, it has been realised according to plan. The main focus is put on dissemination and awareness raising activities as well as eliminating of legal and administrational barriers. According to the National Implementation Plan, the main implementers of green procurement are Ministry of Economy, Ministry of Environment and Polish Centre for Testing and Certification. Above mentioned Plan in detail distributes tasks and obligations between these institutions. Green procurement is not directly a part of legislation. However, existing law does not create any barriers (excluding excessive complication) for introducing green procurement into practice. No legislative initiatives regarding green procurement are planned in the nearest future. If use of green procurement will be still left as voluntary from legal point of view, then development of green procurement will run slowly and will depend only on intensity of dissemination and demonstration activities and the on general awareness level as well as lightly on energy prices and costs. It is not expected that legal obligations on these fields could be introduced in the nearest future in case of Poland. Green procurement is still not very well known in Poland; however the process of disseminating this knowledge is progressing and will bring results sooner or later. 24

25 2.3.9 Hungary In Hungary public procurement currently is regulated by the law 2005 CLXXII which is in force since the 15th January 2006 and fully complies with new procurement directives of the EU (18/2004/EC and 17/2004/EC). The new directives give a wide range of possibilities to implement environmental criteria in the public procurement process but unfortunately in Hungary these are not used. 25

26 2.4 Labels Energy labels are an energy policy instrument of increasing importance. Labels aspire to inform and to convince purchasers to make a greener and a more environmentally friendly decision. With integration of energy criteria taken from energy labels, consumption certificates and/or power requirement documents into purchasing documents, an environmentally friendly procurement can be accomplished. Labels for energy and environment serve to maintain concrete standard values which are established by specialists for lower power consumption in different operating conditions. Concrete saving potentials and realistic target figures can be derived from this information. However, with the increasing number of energy and environmental labels there is a certain risk of confusion for purchasers and end consumers about the selection of useful labels. The most important labels in Europe covering several product groups are the EU Eco-label, the Blue Angel, and the Swan. EU Eco-label The EU Eco-label is being assigned in the member states of the EU as well as any other European states since Publisher is the European Commission. The environmental label is assigned to products and services in 25 groups. The comprehensive criteria include the whole range of environmental aspects. More product groups are in preparation. Internet: 26

27 Blue Angel (Blauer Engel) The Blue Angel is the first and oldest environment-related label in the world for products and services. It was created in 1978 in Germany on the initiative of the Federal Minister of the Interior and approved by the Ministers of the Environment of the national government and the federal states. Only those products are distinguished, which are clearly less damaging to the environment compared to not labelled products on the market. It s the aim to popularise the environmentally friendly product alternatives and to achieve therewith a contribution for the environmental improvement. The label is assigned by the Environmental Labelling Jury. This committee decides on the assignment bases in cooperation with experts and the Federal Environmental Agency. The catalogues of criteria are adjusted to the state of the art in intervals of two to four years. 213 product groups are awarded with the Blue Angel. Internet: Swan Label Sweden and Norway launched the Swan Label in Finland adopted it in 1990, Iceland in 1991, and Denmark in The Nordic Council of Ministers developed this programme and the label is administered by the Nordic Eco-labelling Board (NMN) and by national agencies. The NMN decides which new product groups warrant a labelling initiative, and appoints a pilot country to work on the criteria, based on suggestions from a group of experts from across Scandinavia. The label is usually valid for three years, after which the criteria are revised and the company must reapply for a licence. In this way, it is being ensured that products better suited to the environment are constantly being developed. The Swan covers 66 different product groups. Internet: 27

28 3. Support for Purchasers By using energy efficiently, the operational budgets of an institution can be relieved, a contribution to climate change mitigation can be given and sustainable consumption and markets can be promoted. The success of such actions can also be used in corporate communications. Green public procurement is a systematic process that should be done step by step. Green considerations may be applied to all stages of the procurement process. While private purchasers are free to chose criteria and contractors, public procurement departments have to follow certain procedures: Step 1: Step 2: Step 3: Step 4: Step 5: Consider which products or services are most suitable on the basis both of their environmental impact and of other factors Clarify your needs and express them appropriately. Choose a green title to communicate your policy to the outside world. It is a good way to ensure transparency for potential suppliers or service providers and for the citizens you are serving. Draw up clear and precise technical specifications, using energy labels and/or environmental factors where appropriate. Establish selection criteria based on the list of criteria mentioned in the public procurement directives (Directive 2004/17/EC, Directive 2004/18/EC). Where appropriate include environmental criteria to prove technical capacity to perform the contract. Inform potential suppliers or service providers that they can use environmental management schemes and declarations to prove compliance with the criteria. Lay down the award criteria (in accordance with the procurement Directives of the European Union) of the economically most advantageous tender. Then you have to define relevant environmental criteria either as a benchmark to compare green offers with each other (in the case where the technical specifications define the contract as being green). The other possibility is to take the relevant environmental criteria as a way of introducing an environmental element (in the case where the technical specifications define the contract in a neutral way) and give it a certain weighting. Do not forget to consider the life cycle costing. 28

29 Step 6: Using contract performance clauses is a way of setting relevant additional environmental conditions. The contractor will than be obliged to fulfil all performance clauses of the contract. These performance clauses should be clearly related to the contract s execution. For example, it would not be allowed by way of a contract clause to demand certain environmentally-friendly production methods. Such a requirement does not relate to the execution of the contract, which is, for supply contracts, limited to the actual delivery of the purchased goods. The following principles should be taken into account in all public procurement procedures: Transparency All bidders should be informed in the same way, at the same time; environmental requirements should be specified as clearly as possible, in order to enable objective comparison of offers (this would mean that if, for example, it is requested from bidders to supply electricity from renewable energy sources, then bidders should be asked to prove the origin of the electricity); Non-discrimination Environmental criteria cannot be introduced in order to give an advantage to local or national suppliers; Link all requirements with the object of the contract One cannot, for example, require a vehicles supplier to use recycled paper in its administration or to propose organic food in its canteen; Mutual recognition Contracting authorities should always explicitly recognize and accept products complying with equivalent environmental specifications (as attested under equivalent certifications or schemes). Detailed guidance through the steps of green procurement as well as helpful tools are provided with the purchasing guidelines developed in GreenLabelsPurchase for the product groups of IT, household appliances, lighting, green power, vehicles and building components. 29

30 3.1 Guidance for Procurement Professionals In the project GreenLabelsPurchase tools have been developed to support purchasers in green procurement. The tools consist of guidelines, performance sheets, calculation tools and purchasing policies. The guidelines help public and private procurement departments to apply green criteria according to their purchasing objectives, to clear out uncertainties concerning the legal framework, and to assess the energy conservation potentials. The guidelines are designed for professional buyers and purchasing agents, environment and energy agents, and advisers who recognise the procurement of appliances and energy as an instrument for climate protection and sustainable business conduct. The general guideline provides an introduction to the topic of green procurement, covering the following aspects: legal framework of tender procedures considering environmental aspects; integration of relevant environmental criteria in the procurement policies; compliance with legal framework limitations; integration of environmental aspects in different steps of the procurement process; different procedures and evaluation criteria; The general guideline comprises the basis for the procurement of different products which are relevant for a company or institution. Specific technical guidelines have been developed for the product groups office equipment, household appliances, lighting, green power, vehicles and building components and can be applied accordingly to the individual requirements. In each technical guideline, first the most important energy-relevant technological developments in the individual equipment categories are outlined, as well as the standard yearly energy consumption as calculation basis for the saving potentials. In the following, relevant environmental and energy labels are introduced. Their criteria are compared and potential savings are shown. The guidelines focus on practical references and concrete suggestions on the integration of energy efficiency criteria into the tender. 30

31 The predominant environmental aspect of the guidelines are energy criteria besince energy conservation implies ecological advantages which are often accompanied by economic advantages. The inclusion of further environmental criteria is of course possible and recommended. One main guiding principle which is being applied in all guidelines is an approach with two alternative procedures. Simplified procedure: Only considering minimum requirements, the relatively low effort is directly linked to a relatively low energy efficiency effect. The performance sheet only consists of must-/minimum-criteria considering requirements which are not too hard too achieve. Comprehensive procedure: By weighting environmental criteria versus life cycle costs (LCC), the relatively higher effort will result in a greater effect and the identification of the best economic offer. This allows for the purchaser to choose between an easy and a mora ambitios approach, depending of the preferences of the purchasing institution. In the following an overview over the technical guidelines, each with a short introduction and the most relevant energy labels, is given Office Equipment The rising number of office equipment devices leads to rising energy consumption. Devices like PCs or laptops, monitors, printers, fax machines, phones, and modems are necessary working equipment in almost all modern offices. The energy consumption for information technology (IT) increased relevantly during the last years. A further rising of about 40 % within the next 10 years is predicted 5. Thus, office equipment becomes one of the most relevant energy consuming appliance groups in office buildings and ranges commonly between 20 % and 40 %. On the other hand, savings of about 40 up to 50 % are often economically feasible and will reduce the energy costs about 200 Euro per workplace within the 5-year lifetime of the equipment 6. In Germany 3 % of the total power consumption is accounted for office equipment, information technology and communication systems. 5 6 Fraunhofer ISI/CEPE: Influence of Information and Communication techniques on the energy. Karlsruhe/Zurich Abschlussbericht.pdf EU Energy Star 31

32 Purchasing price, performance, range of features, safety at work and operation costs are the most important factors when procuring office equipment. Against the background of enhanced equipment performance and features, the energy consumption will soon attract more attention simply for cost reasons. The effects on climate and environmental protection will become more important as well. To change the personal behaviour is one way to save energy (e.g. to turn of the monitor when not at the desk). The other way is to buy highly energy efficient equipment. The saving potential of office devices can be assessed by comparing the power consumption of average devices with new efficient devices. Comparison of new efficient with standard devices 90,00 80,00 70,00 60,00 66,3 % 18,21 % Watt 50,00 40,00 30,00 78,08 % 44,29 % standard effizient 20,00 10,00 0,00 PC Laptop LCD-Monitor CRT-Monitor Energy consumption 2007 with an average inventory appliance and an efficient new-appliance 7 The chart shows, how much power can be saved by switching to an appliance which belongs to the 25 % of the most efficient appliances on the market (as defined by the Energy Star Lavel). So far, there is no obligation in Europe for office devices to fulfil certain energy criteria and no obligation exists to label devices of the information and entertainment electronics. Despite this fact different voluntary energy labels for such equip- 7 IVF Industrial Research and Development Corporation: EuP preparatory study, TREN/D1/ , Lot 3, Personal computers and monitors, Intermediate draft report,

33 ment exist and it is possible to find a lot of office equipment that is marked by energy labels. The EU Energy Star regulation requires EU institutions and member states' governmental authorities to apply energy efficiency criteria no less demanding than those defined in the Energy Star programme, when purchasing office equipment. This regulation is the first European legislation making certain energy efficiency criteria mandatory for public procurement. Energy Star The Energy Star is a programme of the US-Department of Energy and the Environmental Protection Agency (EPA). Officeequipments with low energy consumption are world wide labelled with this sign. An EU Energy Star Programme for office equipment has been created in 2002 on the basis of an international agreement between the European Commission and the US-EPA. EC and US-EPA define together the criteria for the appliances covered. The criteria have been adapted in 2007 to the latest technological developments. With the new criteria the Energy Star distinguishes the best 25 % of the appliances per product group. The new requirements include total energy consumption for idle, standby and sleep mode. Due to the relevance of the Energy Star on the European and world wide market it can be assumed, that enough appliances will fulfil the requirements. Thus, the Energy Star criteria are strongly recommended as minimum requirements for every procurement decisions as it is obligatory for public procurement of the US federal ministries. Internet: 33

34 TCO The Swedish environmental and ergonomic label TCO refers solely to office equipments. The label comprises requirements concerning ergonomics, power consumption, emission and ecology. The emphasis lays on the sector of safety at work. The energy criteria are orientated more or less at those of the Energy Star. According to TCO 99 (criteria of 1999) nearly all groups of office equipments can be labeled. In Europe almost all monitors bear the label so far. Catalogues of criteria have been compiled for LCD monitors and mobile phones in 2001 for the first time. These products can receive the label TCO 01. The product group of office equipments (TCO 99) was expanded to notebooks and desktop-pcs with the label TCO 05 in TCO 06 has been developed for multi-functional monitors and TVs. Internet: CE marking The CE marking is not primarily an environmental or energy label. It stands for the agreement of the appliances with the requirements of the Electromagnetic Compatibility (EMC) directive 2004/108/EC and all further relevant Community directives. It is binding for all manufacturers of appliances in the sense of the directive. Processor, keyboard, mouse, monitor and printers as well as their packing have to wear the mark - also the individual components have to fulfil the CE standards. The mark stands also for the compliance with the device-specific European measuring standards, e. g. for the determination of the power consumption. Only appliances with the CE marking are allowed to enter the market in all EU countries. The label should guarantee an acceptable operation of the appliances. Internet: 34

35 Comparison of label criteria Energy Star Blue Angel EU eco label TCO Product Groups Office Equipments, furniture, In the EU only Almost Almost Office Equipment everything everything phones Power Consumption In Operating Mode yes no no no In Sleep yes yes yes yes In Standby yes yes yes partly Safety at Work no yes yes yes Noise Emission no yes yes yes Duty / Voluntary voluntary voluntary voluntary voluntary Costs for Registration no yes yes yes Diffusion Rate Germany, open Sweden, Europe and for foreign producers Europe-wide in Europe mainly world-wide monitors 35

36 3.1.2 Household Appliances Household appliances of different kinds are standard in private households. But they can also be found in companies, administrations and other institutions. Fully equipped kitchens can frequently be found in offices as well as in many public buildings as schools, kindergartens, hospitals, etc. In the procurement of household appliances for offices, schools etc., a reduction of the operating costs can be achieved by considering energy efficiency criteria. Household appliances in office buildings are usually large cooling and freezing units, cookers and dishwashers. For the equipment of living accommodations, schools etc., washing machines, dryers or washer dryers are furthermore needed. GreenLabelsPurchase covers these appliances. Besides the golden rule to only buy appliances which meet the real demand and are not oversized, the EU Energy Label should be used to compare different devices. EU Energy Label The EU Energy Label is based on the framework directive (92/75/EEC) which requires manufacturers and retailers to attach an energy performance label to household appliances. Particular implementing directives provide guidelines regarding the information that should be specified in technical documentation and energy labels for the respective appliances, including an energy performance indicator. The following products are labelled: Refrigerators, freezers and combinations Washing machines, driers and their combinations Dishwashers Electric ovens Room air conditioner Lamps In an attempt to keep up with advances in energy efficiency, A+ and A++ grades were later introduced for refrigerated appliances. Internet: 36

37 3.1.3 Lighting Lighting accounts for up to 40 % of the electricity used in non-residential buildings. Major energy savings can be achieved. Examples from the field have shown that between 30 % and 50 % of electricity used for lighting could be saved by investing in energy-efficient lighting systems. 8 Whereas the biggest environmental impact of most products is caused through resource use, production, transport and disposal, lamps have the biggest environmental impact during their use phase - up to 90 % depending on the lamp type. Therefore, it is worthwhile to consider energy-efficient lamp types for replacement. Environmental impact throughout a lamps life 9 Some years ago, the EU introduced the EU label for lamps (lighting bulbs). The appliances are divided into energy classes from A to G ("excellent" to "not at all efficient"). In principal, only A- or B-class appliances are recommended. Additional energy saving potentials in lighting can be realised trough adequate utilisation behaviour in the offices. Employees can contribute strongly to the saving of power with lighting devices. The following energy saving advices can be useful: Using desk lamps Switching the light off if leaving the room for more than 5-10 min Low-voltage halogen lamps should be switched off with a switchable connexion plug board European Lamp Companies Federation: 37

38 Use of movement detectors in corridors or stairways with small frequentation Lamps and luminaries should be cleaned on regular bases Normal lamps can be disposed with the domestic waste; fluorescent lamps and energy savings lamps contain small quantities of mercury and should be treated as special refuse European Compact Fluorescent Lamps Quality Charter (CFL Quality Charter) The European CFL Quality Charter is a voluntary set of criteria established by the European Commission in collaboration with a number of private and public organisations. The present European Quality Charter for CFL was initially developed in 1998 on the initiative of the European Commission and Eurelectric to support the European Wide Initiative for the promotion of efficient lighting in the residential sector. The aim of the European CFL Quality Charter is to offer a high quality standard to be used by utilities and other bodies in their promotion and procurement campaigns. The ultimate goal of the European Quality Charter for CFL is to increase consumer confidence in this environmentally friendly technology, which saves money and helps the environment. In 2002, the first revision of the European CFL Quality Charter took place. Today the European CFL Quality Charter aims at raising consumer awareness and confidence in the CFL, by assuring that certain quality and performance levels are reached. Internet: 38

39 3.1.4 Green Power With the liberalisation of the electricity market in 1998, the basis for a free market economy competition on the European electricity market was established. Electricity became a free tradable commodity in most member states in Only a few distinctive features exist for electricity, e. g. reliability or frequency fluctuations. For the majority of the customers the price is the most important decision criterion, since all other characteristics are generally assumed. Due to the high quality standard in most member states, only the origin and/or the generation of the electricity remains as further invisible criterion. With the liberalisation of the electricity market, the customer is free to choose his or her power supplier. The number of offers and providers of green power, i.e. electricity of renewable energy sources such as power from water, wind or solar, increases in most countries since then. When buying green power the consideration of certain criteria is recommendable, because not all offers can guarantee an environmental additionality. Today s traditional power mix contains already a certain share of green power. The transfer of existing green power from the traditional mix to green power clients does not cause an additional production quantity. Only the building of new renewable energy plants achieves this environmental impact. Thus, only new installations have an emission-reducing effect and already amortised renewable energy plants have not. In order to give the consumers transparent decision guidance, despite the complexity of the electricity market, different green power labels were developed and introduced into the market. Electricity Disclosure The electricity disclosure is required by Directive 2003/54/EC for all types of electrical power for household customers. The power providers are compelled to declare the relative composition of the obtained power (nuclear power, renewable energy, fossil and other energy 39

40 sources) and its specific environmental impact: CO 2 emission per kwh and nuclear waste in the electricity bill or in an attachment. The electricity disclosure informs only about a few aspects of the obtained energy. Particularly the composition of the power from renewable energy as well as an additional environmental impact is not displayed. Therewith the electricity disclosure increase the comparability of basis information and accomplishes a large-scale transparency, but it cannot replace the different labels for green power. Internet: Guarantee of Origin (GO) Since electricity is a commodity, it used to be impossible to claim any specific quality for a particular quantity of electricity. However the use of guarantees of origin (GO) has changed that. The European Union has implemented a scheme which allows specific attributes to be assigned to particular quantities of electricity. A unique body (e.g. an electricity regulator or a transmission system operator) is usually granted this authority for a given domain. In their most common form, guarantees of origin are issued electronically for a controlled quantity of electricity generation. The Guarantee of Origin is not a label. It shall ensure that the buyer of green electricity has the guarantee that the electricity is produced from renewable energy sources as defined within the meaning of the Directive 2001/77/EC. The GoO should avoid fraud when trading green electricity. It is obligatory for the EU member states to issue GoO to electricity producers when they produce electricity based on renewable energy sources. Internet: 40

41 RECS Renewable Energy Certificate System RECS stands for Renewable Energy Certificate System. RECS was created to stimulate international renewable energy development. The system advocates a standard certificate as evidence of the production of a standard renewable energy quantity and provides a methodology which enables renewable energy trade. This enables a market for renewable energy to be created, thus promoting the development of new renewable energy capacity in Europe. Since 2003 RECS International is fully operational, changing its status from foundation into association in In 2007 RECS International had about 200 members from 24 European countries. Internet: European Network for Green Electricity (EUGENE) EUGENE aims to promote green electricity labelling as a market tool to facilitate and stimulate the development of renewable electricity and energy efficient energy services. EUGENE provides independent, international and credible labelling scheme for green electricity products. The scheme provides a guarantee that any green power scheme adopting the EUGENE label is displacing polluting energy sources and resulting in new green electricity generation over and above national-mandated markets. Although only few organisations have adopted the label so far, the scheme is internationally accepted by experts from environmental and consumer organisations and research institutes, including the World Wide Fund for Nature (WWF) and others. The purchasing procedures for green power in GreenLabelsPurchase demand the additionality of RES systems, as advocated e.g. by the EUGENE and similar national labels. 41

42 3.1.5 Vehicles About one third of the final energy consumption of the EU is used for transport. Most of the fuel used is fossil fuel. Part of the EU strategy to get more independent from oil imports is to reduce the fuel consumption of cars. The European car producers promised to reduce the average CO 2 emissions of the vehicle fleet of CO 2 down to 140 g / km until 2008, however they failed to reach this target. GreenLabelsPurchase has elaborated a scheme, which was not available before, although extensive political discussions about threshold values for CO 2 emissions of cars have been going on in recent years. This scheme has also been adopted in the EU Green Public Procurement Training Toolkit. The data is from Based on the passenger cars classified according to the segments of the German Kraftfahrtbundesamt ( the average CO 2 emissions of all vehicles in a vehicle class made up be the must-criteria for the procurement of a car of that segment. 50 % of the cars can reach them. However, for climate protection these must-criteria are not ambitious enough. That s why target criteria were defined, which are 10% below the performance of the best car in the segment. That means no car fulfils the criterion right now. The ambition for the procurement of particularly saving passenger cars should be to get as close as possible to this target criterion for CO 2 emissions. For passenger cars, the publication of fuel consumption values and hence of CO 2 - emissions is obligatory see European Fuel Economy Label). Not so for transporters and small vans, when the vehicles are licensed as light utility vehicles. Only a couple of transporters - normally smaller than 3.5 t permissible maximum weight - are licensed as passenger cars. This is why presently no proper energy and CO 2 emission criteria are available for light trucks and trucks, although this information would be very helpful. 42

43 CO 2 -emissions in g/km Must-criteria Target-criteria Small cars Compact cars Middle class Upper middle class Upper class Cross-country vehicle Vans Threshold for CO 2 -emissions in g/km for cars developed in GreenLabelsPurchase European Emission Standard European emission standards are sets of requirements defining the acceptable limits for exhaust emissions of new vehicles sold in EU member states. The emission standards are defined in a series of European Union directives staging the progressive introduction of increasingly stringent standards. Currently, emissions of nitrogen oxide (NOx), hydrocarbons (HC), carbon monoxide (CO) and particulate matter (PM) are regulated for most vehicle types, including cars, lorries, trains, tractors and similar machinery, barges, but excluding seagoing ships and aeroplanes. For each vehicle type, different standards apply. Compliance is determined by running the engine at a standardised test cycle. Noncompliant vehicles cannot be sold in the EU, but new standards do not apply to vehicles already on the roads. No use of specific technologies is mandated to meet the standards, though available technology is considered when setting the standards. Since January 1st, 2005, the EURO 4 standard applies throughout Europe (directive 98/70/EC), and is binding for all newly purchased vehicles. As of September 2009, the emissions level EURO 5 will apply to all new passenger cars. 43

44 European Fuel Economy Label The European fuel economy label provides the consumer with information regarding the fuel consumption of passenger cars. It is based on the European directives 93/116/EC and 99/94/EC. The minimum of information which must be indicated for all passenger cars comprises the basic specifications (brand, model, cubic capacity, etc.), the fuel consumption in l/100 km for inner-city driving, extracity driving, and for a combination of both, as well as the CO 2 emissions of the combined driving cycle. Car dealers must make this information available to the customer in an information table to be compiled individually. Although the efficiency of vehicles has improved by over 25 % in the past 30 years, real savings in consumption per vehicle have only been realised to a limited extent. The trend towards higher motorisation, or towards more equipment for comfort and safety, more or less neutralises the increases in efficiency. 44

45 3.1.6 Building Components About one third up to 40 % of the final energy consumption of the EU are consumed in buildings (service sector and private housing). The European Commission considers that, with initiatives in this area, significant energy savings can be achieved, thus helping to attain objectives on climate change and security of energy supply. Thus it is necessary to reduce the energy demand of buildings. Under the framework of Community initiatives on climate change and security of energy supply the European Union developed in the late 1990s the Energy Performance of Buildings Directive 2002/91/EC (EPBD), which entered into force in January All member states have had a period of three years in order to build up relevant systems and measures to transpose and implement the requirements. The EPBD is set to promote the improvement of energy performance of buildings with four requirements to be implemented by the member states: 1. General framework for a methodology of calculation of the integrated performance of buildings 2. Setting of minimum energy standards in new and existing buildings 3. Energy certification of buildings 4. Inspection and assessment of heating and cooling installations. Energy certification (labelling) of buildings is the most important component of the EPBD. The member states are obliged to ensure that when buildings are constructed, sold or rented out, an Energy Performance Certificate is made available by the owner to the tenant or potential buyer. The certification shall also include advices and information on how to improve the building s energy performance. 45

46 Nature Plus Natureplus is an international organisation for sustainable construction and living, with around 100 members in many European countries. The main target of the organisation is a sustainable development of the building sector. The criteria for certification are being developed by independent experts from testing institutes, environmental and consumer organisations and in cooperation with the industry. Natureplus is only awarded to products and building materials that are based on at least 85 mass % renewable or mineral resources. The following product groups are included: Insulation materials Floor coverings Paints and varnishes Mortar, adhesives, plasters Roofing tiles Wood based products and boards Boards for dry building Internet: Umweltzeichen The Austrian Eco-Label Umweltzeichen was set up in 1990 and is awarded by the Ministry of Environment. It is assigned to different products, which cause less environmental damage throughout their product life cycle compared to other products. The label is well known on the market and the only relevant eco-label in Austria. So far, 44 lists of criteria have been issued and 550 products are allowed to use the label. The following product groups are included: Floorings Bricks Insulation materials (mineral origin) Insulation materials (renewable origin) Insulation materials (fossil origin) Paints & Varnishes Wood based products Internet: 46

47 IBO-Prüfzeichen The Austrian IBO label is used for environmentally friendly building materials and is awarded to building materials which fulfil strict environmental criteria, e.g. for bricks, construction boards, insulation material and plaster. The label has been awarded to more than 30 products so far. It is well introduced and very well known among people dealing with eco-friendly building materials but probably not very well known among the general public. Internet: Calculation of Life Cycle Costs The purchase price of a good or service is just one of the cost elements in the whole process of procuring, owning and disposing. Therefore, when evaluating the environmental performance of such a good or service, it is vital to consider all the costs incurred during its lifetime. This is known as the life-cycle cost (LCC) approach. LCC is a technique used to estimate the total cost of ownership. It allows comparative cost assessments to be made over a specific period of time, taking into account relevant economic factors both in terms of initial capital costs and future operational and asset replacement cost. There is no specific legislation in Europe requiring LCC to be taken into account in procurement procedures. LCC should consider: Purchase and all associated costs (delivery, installation, commissioning, etc.) operating costs, including energy, spares, and maintenance end-of-life costs, such as decommissioning and removal All these costs should be taken into account at the awarding stage. Benefits of the LCC approach: All costs associated with a good or services become visible, especially operating costs such as maintenance or energy consumption. It allows an analysis of business function interrelationships. Low purchasing costs may lead to high service costs in the future. Expenditures in various stages of the life cycle are highlighted, enabling public authorities to draw up budgetary predictions. When the life-cycle cost of a contract is considered, green public procurement clearly saves money and protects the environment at the same time. By purchasing wisely, materials and energy can be saved, waste and pollution reduced, and sustainable patterns of behaviour encouraged. 47

48 In GreenLabelsPurchase calculation tools have been developed and tested, that support the purchaser in calculating the life cycle costs and evaluating the most economical offer under consideration of energy relevant criteria. They are provided as spreadsheet documents, so that they can easily be used and personally adapted if wanted. Life Cycle Costs Offer 1 Offer 2 Offer 3 Offer 4 Offer 5 Provider Name xxx xxx xxx xxx xxx Device type Technical Details xxx xxx xxx xxx xxx Category (please check spelling, see list below) Copier Copier Copier Copier Copier Number of devices to be purchased [number] n n n n Average utilisation of devices referring to 40h/week [%] 100% % 100% % 100% % 100% % 100% Average hours per year in on mode [hours/year] 330 h/y 330 h/y 330 h/y 330 h/y 330 Average hours per year in sleep mode [hours/year] h/y h/y h/y h/y Average hours per year in standby mode [hours/year] h/y h/y h/y h/y Power consumption in on mode [W] 800,0 W 800,0 W 800,0 W 800,0 W 800,0 Power consumption in sleep mode [W] 95,0 W 95,0 W 95,0 W 95,0 W 95,0 Power consumption in standby mode [W] 2,0 W 2,0 W 2,0 W 2,0 W 2,0 Investment Costs Purchasing costs per device (Euro/device) 1000,00 500,00 0,00 0,00 0,00 Installation costs per device (Euro/ldevice) 0,00 0,00 0,00 0,00 0,00 Delivery expenses (Euro/device) 0,00 0,00 0,00 0,00 0,00 Assessories (Euro/device) 0,00 0,00 0,00 0,00 0,00 Total investment costs for all devices [Euro] , ,00 0,00 0,00 0,00 Energy Costs per Year Electric energy price (Euro/kWh) 0,20 0,20 0,20 0,20 0,20 Energy consumption per year (kwh/year) ,0 kwh ,0 kwh ,0 kwh ,0 kwh ,0 Energy consumption costs per year , , , , ,00 Other Running Costs per Year Hourly wage for the maintenance [Euro/hour] 0 /h 0 /h 0 /h 0 /h 0 Maintenace effort per device [min/device] 0 min 0 min 0 min 0 min 0 Maintenace costs per device [ ] 0,00 0,00 0,00 0,00 0,00 Other Costs per device [Euro/device] 0,00 0,00 0,00 0,00 0,00 Maintenance and other running costs per year 0,00 0,00 0,00 0,00 0,00 Total Running Costs per Year Total running costs per year (Euro/year) , , , , ,00 Total running costs per device per year (Euro/year) 92,48 92,48 92,48 92,48 92,48 Input for Present Worth Factor (PWF) for LLC Example of a calculation tool developed in GreenLabelsPurchase 3.3 Green Procurement in Practice In the project GreenLabelsPurchase good practice examples of private and public institutions were gathered. Good practice examples give orientation to institutions, which want to gain experience about green procurement. In each example published on the GreenLabelsPurchase website, precise data with costs and savings are listed. The contact person that is named with the example can give further information, if needed. The examples were partly also presented on events. Summarised examples for each product group are given in the following. The examples have been implemented before the start of GreenLabelsPurchase. They also reflect the degree to which green procurement is being implemented in the respective countries. 48

49 3.3.1 Good Practice Example - Office Equipment - Poland General Directorate of the State Forests (Regional Directorate in Zielona Góra) The State Forests SF is an organisational unit not enjoying legal personality. The primary mission is to preserve and to extend forestry resources in Poland, as well as to make sustainable use of them. SF administers nearly 7,6 million ha, i.e % of Poland s forests and almost 25 % of the country s entire area. SF has over employees. Organisation of the procurement The public procurement procedure was developed and implemented by the Regional Directorate of SF in Zielona Góra according to the Polish Public Procurement Law. No specific measures were applied. Procurement was realised according to the unlimited opened bid. The awarding criteria price 100%. Measures The tender procedure covers procurement of Regional Directorate Office with the following office equipment: 70 stationary computer kits, 73 LCD monitors, 11 laptops, 7 laser monochrome printing machines, 1 laser colour laser printing machine, 14 ink-jet colour printing machines, 11 scanner machines, 18 network fixture and accessories. Contractors are obliged to provide offers including technical specifications for all units confirming satisfying of the requirements specified in tender announcement as well as requirements and standards specified in the following certificates: ISO 9001 referring to designing and manufacturing processes, ISO referring to environmental aspect of manufacturing process, manufacturers declarations of compatibility of products with 73/23/EEC and 89/336/EEC Directives, manufacturers declarations of compatibility of products with PN-EN ISO 7779:2005 and PN-ISO 9296 standards regarding the level of sound pressure, TCO 03, ISO standards, EPA Energy Star standards (labels), CE certificate. Success There were no environmental effect and cost savings estimations made, however reduction of the electricity demand and exploitation cost compare to the present state were expected due to high performance and quality requirements for purchased products. 49

50 3.3.2 Good Practice Example - Household Appliances - Hungary Municipality of Nyíregyháza The procurement process is done by the municipality. The present case is about the purchases of the city library. The procurement was aiming at the total modernisation of the library with new web cameras, scanners, AV appliances (radio, TV), fax machines, copiers and new monitors. For the refrigerators, dishwashers, and washing machines energy labels were asked for. Organisation of the procurement The procurement is implemented by a company working for the municipality. It is done according to Hungarian law. Measures In the technical specifications the required energy labels are determined by products: 9 refrigerator ( litres) with energy class A 20 refrigerators (60 litres) with energy class A 1 dishwashers with energy class A 2 washing machines with energy class A Success In Hungarian procurement tenders generally there are not any calculations for cost- and CO 2 -savings. Here, the procurer was convinced that the Class A is better then other products. They not even monitor that; they achieve some cost savings as they know that these A-labelled equipment use less energy. 50

51 3.3.3 Good Practice Example - Lighting - Hungary Local Authority of the Municipality of Budapest Budapest is the capital of Hungary with a population of 1.75 million. Budapest consists of twenty-three districts. The Hungarian capital city has a peculiar dual selfgovernment system. This means that in addition to the Budapest Municipality, the local government of Budapest, each of the twenty-three districts have their own government, the so-called district governments, with elected mayors and a body of representatives. Organisation of the procurement The Municipality of Budapest is responsible for the public procurement at three stages: The procurement activities of the mayor s office are mainly organised and implemented by a special Procurement Department. In special cases, when the special expertise is needed, the other departments have the right to procure. Most institutions which are operated by the municipality (schools, hospitals etc.) have the right to do public procurement but the approval of the mayor s office is needed. Firms which are partly or entirely owned by the municipality are responsible for their own procurement. The municipality has the proper rules and laws for all cases. This case belongs to the first type, and is organised by the Department of Transport. Measures Budapest has 911 traffic lights, operated by The Municipality of Budapest. The previous contract ended on 31 December The public procurement was to find a company for an 8 year operation contract, combined with the installation of new LED lights. Out of the 911 traffic lights 241 had to be changed to new ones, around 300 had to be modified. Energy saving of 17 % were the target. This kind of contract was chosen because of the benefits for: the environment: energy saving the municipality: they do not have to pay for the modernisation the company: after the modernisation (2 years) they will get the same amount of money from the municipality for six more years as operational costs but the real operational costs will be lowered by 17 % Success According to the calculation of the Department of Transport after the installation of the new LED lights the energy use of the whole system will decrease by 75 %. 51

52 3.3.4 Good Practice Example - Green Power - Germany Oktoberdruck AG Oktoberdruck is an offset print office. It was founded in 1973 as a self-governing company. As the first print office in Berlin/Brandenburg, Oktoberdruck has a certified environmental management system (EMAS). Oktoberdruck does not only set high demands on its own products, but also on its corporate responsibility. Therefore the company decided to procure certificated green power. Procurement process The Management of Oktoberdruck decided about procurement of power. The members in the EMAS-Team prepared the procurement decision. Measures In the environmental statement for the Eco-Audit according to EMAS (Eco- Management and Audit Scheme), Oktoberdruck bindingly compelled itself for the procurement of green power and has laid down the target to lower the CO 2 emissions by 2006 by 30 % in relation to Since autumn 2005 Oktoberdruck obtains only ok-power certificated green power, which also adheres to the criteria of the TÜV North. Success With the procurement of green power Oktoberdruck lowered their CO 2 emissions by 225 tons (94 %) per year. 52

53 3.3.5 Good Practice Example - Vehicles - Finland Fortum Oyj Public company that produces, distributes, and sells electricity and district heat in the Nordic and Baltic countries, Poland and Russia. The company has a programme for procuring/leasing cars and vans. This is taken care of by the Corporate Support Services. Organisation of the procurement The company has a policy for sustainable development. This policy is applied also in the procurement activities, where environmental and life-cycle criteria are included. There are no legal obligations in this respect. The company has the ISO environmental management standard in use. (The company has more than 10 ISO certificates, which cover over 90% of the business activities) The procurement process concerning cars and vans is taken care of by the Corporate Support Services Department of the company, the Service Manager being in charge of the activity. The procurement criteria are published in a manual, which is not publicly available but distributed to the car dealers only. Fortum leases some 600 cars for the personnel of the company in Finland, 1400 in Sweden and 130 in Norway. Measures The company sets emission criteria for the cars to be leased and demands the emission data from the car dealers. Based on this information, together with the mileage data from each car, the company maintains a register of annual emissions of the whole fleet. This information is then included in the annual environmental report of the company. In the car procurement policy of Fortum safety goes hand in hand with the environmental requirements. The manual gives a detailed list of technology, tools and supplies to be provided to make the use of the car as safe as possible. In addition, Fortum runs a training programme of economic and safe driving for those who are driving cars leased by the company for them. Success The total greenhouse gas emissions from the fleet were 9400 tons of CO 2 equivalents in Taking the mileage and the size distribution of the cars into consideration a comparison could be made with a reference group of cars in the same categories. This comparison has not yet been made to have an estimate of the emission and cost saving impact of the procurement policy. The EcoDriving programme pertaining to good fuel economy and safety in traffic has given good results, with the specific consumptions down by 5-10 %, in the best cases by close to 20 %. 53

54 3.3.6 Good Practice Example - Building Components Upper Austria Energiewerkstatt Energiewerkstatt is an engineering company specialized in planning wind farms but provides also services in consulting (energy efficiency, renewable energy sources). In 2003 & 2004 a new office building (380 m²) was constructed in Munderfing which aims at 100% energy supply from renewable energy sources. Organisation of the procurement For the planning and implementation of the new office building, the following criteria were set: 100% energy supply from renewable energy sources environmental friendly construction materials low energy consumption timber construction, focus on local/regional building materials preference for local/regional suppliers Measures The office building was constructed as low energy building with the following measures applied: building shell: 28 cm insulation, U-value = W/m²K roof: 30 cm insulation, U-value = W/m²K windows: triple glazing, U-value = 0.7 W/m²K air tightness: nl50 = 0.3 1/h Only environmental friendly construction material was used, e.g. the building is built in timber construction using cellulose insulation material. The building is to 100% supplied by renewable energy sources: 3.1 kwp PV-plant The remaining electricity consumption is covered by wind energy (the company holds shares of a wind park) 22 m² solar thermal collectors for covering the hot water consumption and seasonal heating 15 kw pellets heating boiler Success The low energy consumption office building, which is supplied 100 % by renewable energy sources, was constructed at very low costs. 54

55 3.4 Institutional Purchasing Policies The objective of the purchasing policies developed in the project is to give interested institutions text elements with which they can supplement their internal purchasing policies with green criteria. Thereby the topic of green procurement shall be implemented within the institutions environmental strategy and procedures on a long term. The developed text elements define requirements and criteria for the product groups dealt with in the project. For each product group, ambitious must criteria and very ambitious target criteria are defined from which an institution can chose according to their environmental standards. The following guiding principles have been used for the preparation of the purchasing policies: The concept of life cycle costs is fundamental for green procurement. The requirements and proof of the criteria has to be clear to the purchaser. It was referred to criteria of established energy and environmental labels, which are renewed regularly. For each product group references to further information and support is given. The process for implementing purchasing guidelines takes time, because these documents are designed to give guidance for a longer period. At the same time, they play an essential role in the whole purchasing process in private and public institutions and can contribute to make the efforts for green procurement more sustainable. 55

56 Example of a sustainable purchasing policy: (a) Procurement plays an important part in the institutional policies for sustainable development, energy savings, CO 2 emission reduction and climate change mitigation. These aspects have to be taken into account in all procurement activities. For the protection of our natural livelihood, energy efficient and environmentally friendly products are to be purchased with priority. (b) The most economical offer is to be determined by looking at the life-cycle costs of a product, taking into account inter alia the energy costs over the life-span of the product. Suitable typical usage patterns are to be considered. (c) The application of more ambitious target criteria as defined in several ecoefficiency initiatives 10 as well as the adherence with additional environmental criteria 11 is to be aimed at. (d) In the assessment of the received offers, the more ambitious target criteria and the environmental criteria should be weighted with at least 30 but not more than 45 % of the overall score. The life-cycle costs are to be weighted with at least 50 % of the overall score. If in particular cases these principles can not be respected, this has to be justified. The environmental manager is to be informed. (e) Purchasing criteria for selected product groups: Office Equipment The selected appliance must belong to the top 25 % concerning energy efficiency among the appliances of its class. Normally, this is being verified by meeting the criteria of the Energy Star label. 12 Additionally, the adherence to other environmental criteria should be aimed at For example and For example as defined by the EU ECO-Label ( or the RAL environmental sign ( 56

57 Household appliances Any household appliance must at least have the EU energy label of the second best class available for the specific appliance category (minimum criterion). As an additional target criterion, the appliance should have the EU energy label of the best class available for the specific appliance category. 13 Lighting Lamps which have to carry the EU energy label must at least have the energy label of the second best class available for the specific lamp type (minimum criterion). As an additional target criterion, the lamp should have the EU energy label of the best class available for the specific lamp type. If halogen lamps are being purchased, they must use the infra red coating (IRC) technology or alternative technologies which are at least as energy efficient. Outdoor lamps must use ballast with low losses. Mercury vapour lamps may not be purchased. Green power To meet the climate change mitigation targets, an adequate share of the electric power consumed should be generated from power generation on the basis of renewable energy sources. The share is adequate when it complies at least with the EU reference values for the RES share in the electricity mix of a specific country for Normally, the best available class of the EU energy label is class A, the second best class B. For refrigerators and freezers, the best class is A++, the second best is A+. For washing machines, the best class is A+, which has been established in the context of a voluntary agreement on reducing energy consumption of domestic washing machines by the European industry for domestic appliances. The second best class is the official class A energy label for washing machines. As defined in Directive 2001/77EC: BE: 6,0%; DK: 29,0%; DE: 12,5%; GR: 20,1%; ES: 29,4%; FR: 21,0%; IE: 13,2%; IT: 25,0%; LU: 5,7%; NL: 9,0%; AT: 78,1%; PT: 39,0%; FI: 31,5%; SE: 60,0%; UK: 10,0%. 57

58 An additional environmental benefit is to be achieved through the guarantee of the provider, that at least a share of 30 % of the green power sold has been generated in facilities not older than 6 years, counted from the starting date of the power delivery contract. [optional: No part of the delivered power may come from nuclear power generation; the power generation does not produce radioactive waste.] Vehicles The vehicle to be procured must belong to the 50% most efficient vehicles of its class concerning CO 2 emissions. The vehicle must at least comply with the current exhaust emission standard for motor vehicles (mandatory criteria). As additional target criteria, the vehicle should belong to the 25% most efficient vehicles concerning CO 2 emissions. 15 Furthermore, the vehicle should comply with the exhaust emission standard for motor vehicles after the next adaptation of the norm (if the respective vehicles are already available). The EU Commission aims to propose a legislative framework to reduce CO 2 emissions from new cars and vans in With the adoption of this new legislative framework, the minimum target for vehicles to be procured should then be at least the CO 2 /km target value of the respective vehicle class in the new EU legislation. [optional: 20 % of the newly purchased vehicles use alternative propulsion or fuel types]. Closing remark Additional energy and cost savings even with very energy efficient products can be achieved through energy management and training measures. 15 Respective reference lists are to be identified on the national level. For Germany, efficient vehicles are listed at 58

59 Final Event GreenLabelsPurchase On 5 March 2008, the international conference "Energy Efficient Procurement" was held in Wels, Upper Austria. The conference was organised by the OÖ. Energiesparverband. Partners were involved in the development of the programme. The conference was an important part of the whole project and a highlight of the public relation work within the dissemination approach. The target was to inform about possibilities and best practices of energy efficient procurement procedures across Europe and to increase the awareness for energy efficient procurement by using energy labels. Other discussed topics were the EuP-preparatory studies on commercial fridges and freezers, instruments for public and private procurement decisions in favour of energy efficiency and a concrete guidance how to build up a green procurement system in a company or public body. Speakers from different countries as well as the consortium partners of BEA, ZRMK, ENEA and ESV reported their experiences. Around 150 participants, including key actors, attended the event. 59

60 4. Making Green Procurement happen To make green procurement happen a strong focus was laid on consulting companies and public institutions to realise pilot projects in the project GreenLabelsPurchase. The basis for the consulting activities was the elaboration of at least four of the six technical guidelines in national language. This did not only imply a mere translation but also adaptations of the text to take into account national peculiarities. The guidelines and tools in national language were then published on the country specific subsites of the GreenLabelsPurchase internet site. With extensive PR activities and mailings, professional procurers were informed about the offers of GreenLabelsPurchase. Initial consultations were performed face to face, by phone or by . Not only procurers used this opportunity. With Volkswagen AG, an important car manufacturer inquired about the developed criteria for the CO 2 emissions of vehicles, which was developed by GreenLabelsPurchase to distinguish energy saving vehicles in the respective vehicle segments. Such a scheme had so far not been available, although extensive political discussions about threshold values for CO 2 emissions of cars have been going on in recent years. The GreenLabelsPurchase scheme was also adopted in the EU Green Public Procurement Training Toolkit. In a second step, in-house advice sessions served to deepen consultations in the companies or administrations. In these consultations, normally several persons of the respective institution attended. Concrete procurement cases could be discussed here with professional assistance. An important part of GreenLabelsPurchase was the initiation of pilot projects. These projects were accompanied closely and aided with the use of the procurement tools. In the course of the action, 46 pilot projects for green procurement were initiated and mostly completed. Additionally trainings of multipliers were conducted to teach them on how to consult professional purchasers on green procurement. 60

61 4.1 Greening Procurement in Public Administrations Public authorities are normally more experienced with green procurement issues than private institutions. This has several reasons: On the one hand, they are in the focus of public attention, which is why they are more often demanded by politics to step ahead with innovative concepts such as green procurement. Furthermore, city networks such as ICLEI have started initiatives on green procurement with communities already several years ago, so that many of them have already been in touch with this issue. At the same time, the legal requirements on procurement are much more demanding for public institutions, so that there is also a bigger need for consultation and tools. Some of the project partners had close links to public administrations and largely focussed on this group in their work. The contacted municipalities were often very interested in the purchasing guidelines developed by GreenLabelsPurchase. Some active municipalities already had general purchasing guidelines for years that include aspects of environmentally friendly purchasing. Often their focus lies on the purchasing of recycled paper for copying machines or room cleaning detergents. Only some frontrunner municipalities have included energy related aspects into the purchasing guidelines. Hence, it was very appreciated to get input to amend existing general purchasing guidelines or to get a nucleus to start from to set up purchasing guidelines for the municipality. Here are examples of pilot projects of public institutions within the project. 61

62 4.1.1 Pilot Project - Office equipment - Italy Region Lombardy/Agenda 21 Cremona With the help of the GreenLabelsPurchase Guidelines on office equipment ENEA contributed to the definition of guidelines for such products in the Region Lombardy. Organisation of the procurement A series of meetings was organised by Agenda 21 of Cremona and Region Lombardy for the definition of the criteria for green products as foreseen by the Regional Law 2 December 2006, Art on green procurement. Measures ENEA contributed to the definition of minimum requirements for the purchasing of office and other electronic equipment, referring to energy and ecologic labels: the experience of the GreenLabelsPurchase and draft guidelines on IT were used as input to the Agenda 21 experts Success Green public procurement criteria for office equipment drafted within GreenLabelsPurchase project (mainly new Energy Star criteria) were presented to the working group members (Local Agenda 21 and Region Lombardy experts, economist and administrator of Local institutions and municipalities of Lombardy) and were positively considered for inclusion in future green procurement actions. 62

63 4.1.2 Pilot Project Green Power - Germany KfW Bankengruppe KfW is a large bank owned by the German government and the federal states. KfW is strongly committed to sustainable development. The bank is the largest financer of energy efficiency investments, both of homeowners and businesses. Procurement process KfW Bankengruppe has developed an environmental management system to ensure that environmental issues are taken into account in all business areas. Specific guidelines have been developed for all environmentally relevant areas and inhouse environmental protection. KfW strives to realize a universally valid purchase policy for eco-friendly procurement. Measures KfW Bankengruppe has been supplied with conventional power until the September From October 2007 on, all KfW facilities were to be supplied with 100 % green power: the headquarters in Frankfurt, branches in Berlin and Bonn as well as the KfW subsidiary DEG in Cologne (when moved into the new building, autumn 2008); plus several rented buildings. The European call for tender was based on the brochure, published by the Federal Ministry of Environment and the Federal Environment Agency Beschaffung von Ökostrom Arbeitshilfe für eine europaweite Ausschreibung im offenen Verfahren (procurement of green power manual for an European call for tender) which is recommended by GreenLabelsPurchase. The tender was accompanied by the Berliner Energieagentur GmbH regarding the CO 2 reduction as a criterion for the assignment and CO 2 balancing of the KfW Bankengruppe. Success The purchase of green power consisting of water power from NaturEnergie AG induced a cost increase of about 4 % in comparison to the prior contract. This is still below the public price increase of current suppliers from 2004 to 2006, so that in fact even an economical advantage was achieved for the bank. To evaluate the quality of the green power, the CO 2 reduction of the power was assessed. The CO 2 reduction of new plants was rated higher than that of older plants. A minimum CO 2 reduction of 30 % was demanded in the tender within the supplying period. NaturEnergie AG guaranteed a reduction of at least 42 %. The evaluation of the KfW balance takes CO 2 reductions into account of both new and old plants on a similar basis. As a result, the KfW Bankengruppe is credited for tons saved CO 2 per year. 63

64 4.2 Greening Procurement in Private Businesses Some private companies already have a high standard of environmental management sometimes with certifications according to EMAS or ISO including policies for green procurement. Others have never thought about including energy criteria in their purchasing decisions. In general, it was more difficult to reach big enterprises, because they often have professional purchasing departments with long-established procurement standards. Also, in larger companies, energy efficiency targets are already followed more systematically. Small and medium-size enterprises (SME) often lack the manpower to get involved into the subject of green procurement, which is why they were often more open to consider this subject matter. Here are examples of pilot projects of private institutions within the project. 64

65 4.2.1 Pilot Project - Lighting - Latvia Conference Hotel TOMO Hotel "TOMO" started its environment-related activities by participating in IEE project "GreenLight", the aim of which was to improve lighting technologies and to switch from inefficient to efficient lighting. The participation in the project and fulfilling the aims lead to the necessity of several bulk lighting purchases. The company was offered to implement a GreenLabelsPurchase pilot project and to use green purchase procedures in order to evaluate the offered products. Organisation of the procurement As a partner of the European GreenLight Programme for efficient lighting, TOMO Hotel committed itself to the change the existing lighting systems to more energy efficient technologies. The first project to be implemented was the substitution of approximately 100 incandescent bulbs in the hotel restaurant to highly efficient CFL bulbs. The management of the hotel was interested not only in purchasing the most efficient bulbs today, but also in being sure that the purchase is efficient in long terms and is environmentally friendly. Measures The GreenLabelsPurchase procedure has been applied for the lighting technologies product group. In October 2007 the following process was implemented: The comprehensive procedure for compact fluorescent lamps with internal ballasts (Performance sheet, Alternative B) was sent out to three suppliers. One of the suppliers was not able to fill in the table and was automatically excluded from the competition. Based on the information provided by the two remaining bidders the calculation tool was filled in. Both parts - for life cycle costs and for best economic offer - were used in this procedure. Based on the results the decision was made. For life cycle costs, a comparison with a regular incandescent bulb was made. Success The planned cost savings from the lighting upgrade project implemented in the hotel restaurant will come up to approximately per year. This saving is based on existing electricity tariff and installation costs and made as comparison of existing and chosen technologies. Expected CO 2 savings are 4.1 t / year. The calculation was made using the official carbon saving factor for the time period of yy which is equal to 363 g. CO 2 /KWh. 65

66 4.2.2 Pilot Project Vehicles - Latvia Name of the Institution: IT Works Ltd., Latvia IT Works Ltd is a small IT company that had to choose between two cars in terms of efficiency, environmental issues, and price. In October 2007 the company decided to participate in GreenLabelsPurchase as a pilot project and was offered to use calculation tools for vehicles in order to make the choice less complicated. Organisation of the procurement Since there is no financial support available in Latvia for purchase of "green vehicles", neither for companies of private persons, and the price for, e.g. hybrid cars is considerably higher than for a regular car, it was decided to choose from two benzene driven cars. Measures Performance sheet B was used to evaluate environmental and technical performance of two existing choices. The date from technical specifications of the cars available at dealers' web pages was used to fill in the performance sheets. The calculation tool was applied to define the best choice between the two cars. Success The expected cost savings that will result from choosing the best alternative will make EUR per life cycle of the car, t.i. 5 years. Planned CO 2 savings are 0.9 t per year produced by choosing the best alternative. 66