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How can public procurement drive low-carbon innovation in infrastructure projects?

In collaboration with the International Institute for Sustainable Development (IISD), i24c launches its report titled “Low-carbon innovation for sustainable infrastructure – The role of public procurement” which looks at how to leverage the power of the public purse to maximise low-carbon innovation for sustainable infrastructure.

Public procurement is a powerful tool for driving markets towards more sustainable production patterns and for creating markets for sustainable goods, services and infrastructure. Effective public procurement is about delivering the best value-for- money for taxpayers. All too often the meaning of value-for- money is reduced to “cheapest price”. Not only is this incorrect, it is also a missed opportunity to use public money to deliver on the goals governments are pursuing on behalf of citizens: low- carbon transition, employment, sustainable development.

The construction industry is a key candidate for increasingly using strategic public procurement: infrastructure assets are the largest area of public spending and their carbon impact is significant during all the stages of the lifecycle. To date public procurement is not used to its full potential to generate sustainable value for society and incentivize the sector to invest in deep decarbonisation.

At the moment, the EU’s comprehensive legal policy framework allows for and encourages the use of strategic and innovative procurement of low-carbon innovation across the EU. However, to further seize the strategic opportunity of public procurement, procuring authorities and their staff should be empowered to use the intervention points along the procurement cycle as a means to better manage, reduce and share risks associated with the procurement of low-carbon infrastructure solutions.

The report outlines several recommendations for policy interventions at both EU and MS level that need to take place to fully leverage the benefit of procurement of low-carbon innovations in the construction value chain:

  • Encourage and scale private sector investment into low-carbon building materials through sector-specific low-carbon targets, supply chain collaboration and bundling of demand for low-carbon infrastructure.
  • Engage with the market early on to identify low-carbon innovation and stimulate collaboration throughout the construction supply chain.
  • Use tender specifications that ask for specific low-carbon materials (technical specifications) or use performance based specifications that refer to the carbon performance of undefined building material, or infrastructure asset.
  • Use holistic award methodologies and tools that make low-carbon performance a competitive element of the bidding process
  • Use innovation brokers to increase capacities among public and private sector actors to engage in procurement of innovation and the deployment of low-carbon infrastructure solutions.

This research is undertaken by Liesbeth Casier and Laurin Wuennenberg at IISD, and is enabled by a grant from the European Climate Foundation.