Green public procurement for biomass (wood pellets) in Valka

Transcription

1 Green public procurement for biomass (wood pellets) in Valka Organisation: Latvian Environmental Investment Fund and Valka Municipality Purchasing higher quality pellets from known origins for better performance of combustion equipment and lower emissions Standard product / conventional tender Lower price with potentially lower energy efficiency Pellets from wood with unknown origin GPP (PRIMES) tender Higher energy efficiency Lower emissions Results Estimated capture of CO 2 by 328 t instead of fossil fuels If origin of pellets is unknown, no guarantee for quality and forest management This template is developed by GPP 2020 and modified by PRIMES. For more information about GPP 2020 check out

2 2 PRIMES case study Introduction to case 1.1 PITCH-TALK SUMMARY The Municipality of Valka decided to apply principles of green public procurement to the purchase of wood pellets for heating up buildings (biomass). Besides applying green principles, the municipality wanted to avoid the increase of costs. By help of the PRIMES Task Force team the municipality developed procurement documents to find the most economically advantageous offer. 1.3 CASE CONTENT AND ISSUE 2 The biomass traditionally is regarded as a green solution, but this is not always the case: the intensive production of wood biomass can lead to deforestation, the high use of fossil fuel during production of pellets means no real reduction of CO 2 emissions, and low quality wood fuel can cause high emissions as well as damage combustion facilities. The transportation of wood pellets also causes emissions and load to road infrastructure. 1.4 SOLUTIONS APPLIED The procurer decided to include green criteria in the procurement process. Via consultation with market participants, Latvian Biomass association and interested parties (NGO s), municipality decided to apply criteria from voluntary ENplus certification scheme for wooded pellets developed by European Biomass association. This certificate requires pellets from known sources, limits carbon footprint from pellets production during whole life cycle, and guarantees higher quality. The procurer also preferred pellets with lower transportation distance. Tender features Subject matter: Wood pellet delivery for Valka municipality Value of the contract: VAT Type of procedure: Open tender Type of contract: Supply contract Nature of contract: Direct contract Division in lots: no

3 PRIMES case study on Green public procurement for the renovation of an old municipal building in Liepaja Procurement objectives The objective of the tender was to purchase high quality wood pellets. Procurement approach Selection criteria: Bidder must hold a valid ENplus certificate, or equivalent, and it is registered in a publicly accessible register: http: // (wood pellet manufacturers); http: // (wood pellet traders); or an equivalent register. 3 The technical specifications: Pellet quality requirements pellets must comply with requirements according ENplus A1 class pellet standard: the geometric size: 6-8 mm in diameter, 3,15-40mm length density kg per cubic meter dry (relative humidity <10%) no chemical impurities clean, free of foreign matter (including bark and sawdust) net calorific value 4.6 kwh / kg ash content < 0.7% of the weight burned Verification: Test result issued by ENplus inspection authority or comparable document The samples of pellets provided by bidder are selected by inspector acknowledged by ENplus or equivalently certified expert in accordance with the standard EN Award criteria: Price (70%) Ash content (15%) Distance to production place (10%)

4 4 PRIMES case study Calorific value (5%) Since there were 5 different places of delivery of pellets, the medium distance was calculated proportionally to estimated tonnage of pellets to be delivered. 4 Contract performance clauses The quality of supplied pellets shall correspond to the technical specification and offer of the bidder; the recipient is not accepting pellets that do not correspond to the quality agreed. The supplier shall bear all the losses caused to the recipient, if the quality of the delivered pellets does not meet the requirements of the technical specification. In case of the delays of supply the contractor (Valka municipality) apply fine 0,1% for each delayed day but not more than 10%. Criteria development Since there are no common EU criteria for wood pellets, PRIMES team helped municipality to organise a workshop with market participants, Latvian Biomass association and environmental NGOs. There was a consensus among participants that ENplus standard (a voluntary certification scheme developed by European Biomass association) is a good starting point for criteria development. However, this standard is not complying with sustainable forest management schemes and this shall be addressed additionally, but there are intentions to incorporate in future.

5 PRIMES case study on Green public procurement for the renovation of an old municipal building in Liepaja Results 4 bidders participated; the bidder with best price offered also offered lowest ash content (0,4 %) and 2 nd best calorific value (5 kwh per kg). GPP tender, t /annually CO 2 emissions of wood combustion, t CO 2 emissions from production of pellets CO 2 capture by forest The calculations are based on carbon content of wood pellets and life cycle data about carbon footprint 1. Unfortunately after first supplies Valka city received complaints from their combustion operators that pellets are low quality, and there are suspicions, that supplier does not supply ENplus certified pellets. The case is under investigation now, that municipality prepares documentation for termination of contract and filling complaint to certification body of pellets. 1

6 6 PRIMES case study Lessons learned 6 The prior market consultation with market participants, association and NGOs was very helpful in designing the green criteria. It seems, that compliance with ENplus standard shall be taken as a minimum green requirement for wood pellets, and there are many market participants ready to deliver such pellets. The green procurement is not preventing from fraudulent supplies but clear quality criteria help to insist on improvements or termination of the contract. Proper formulations of contract performance clauses therefore are very important. Training for recipients of pellets on quality control and monitoring could help more advanced identification of the supply problems identify. Despite caution, there was no price increase due to green criteria e.g. the final price per ton was 3% lower then previous year. On the other hand, the winner seems not to follow the agreements, and a new procurement might be started. To green the procurement, in future pellets from sustainable forestry sources (corresponding with FSC or PEFC standard) shall be acquired; however, the experience from Valka shows that known origin of the pellets and ENplus certification shall be a minimums requirement. Next step shall be inclusion criterion on carbon footprint of pellets: all producers complying with ENplus standard have such information (not required in this tender). Contact: zane.bilzena@lvif.gov.lv ; jana.simanovska@lvif.gov.lv

7 PRIMES case study on Green public procurement for the renovation of an old municipal building in Liepaja About PRIMES Across six countries in Europe; Denmark, Sweden, Latvia, Croatia, France and Italy, PRIMES project seeks to help municipalities overcome barriers in GPP processes, many of which lack capacity and knowledge. PRIMES aims to develop basic skills and provide hands-on support for public purchasing organisations in order to overcome barriers and implement Green Public Purchasing. This will consequently result in energy savings and CO 2 reductions 7 About GPP 2020 GPP 2020 aims to mainstream low-carbon procurement across Europe in support of the EU s goals to achieve a 20% reduction in greenhouse gas emissions, a 20% increase in the share of renewable energy and a 20% increase in energy efficiency by To this end, GPP 2020 will implement more than 100 low-carbon tenders, which will directly result in substantial CO 2 savings. Moreover, GPP 2020 is running a capacity building programme that includes trainings and exchange.

8 8 PRIMES case study 8 The sole responsibility for the content of this case study lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein. Disclaimer The above text contains general information on the referred procurement procedure. This information is for general guidance only and shall not be treated as legal advice. In case you have any questions related to the procedure please contact the partner as indicated in this document.