The role of public procurement in decarbonising the construction sector

Climate protection goals have triggered a profound industrial transformation fuelled by the anticipated demand for technologies that can enable decarbonisation—so-called clean technologies—such as solar panels, wind turbines, heat pumps, electrolysers, batteries and electric vehicles, around whose value chains a global challenge is unfolding.

In this context, Europe faces a significant competitiveness and innovation gap compared to China and the United States, burdened by higher costs and energy dependencies than its competitors and partners, as well as an industrial structure that is less inclined to translate innovation into development and markets.

The new Commission, from its initial actions, has focused on a more effective framing of decarbonisation prospects, coordinated with bridging the Union’s competitiveness gap.

Globally, it is estimated that about 50 percent of the emissions associated with the built environment come from the use of materials such as cement and bricks. For construction materials, the challenges of decarbonisation are particularly complex. Greenhouse gas emissions in these sectors are intrinsically tied to the chemical and physical processes of production mechanisms. In addition, technologies and solutions to reduce emissions are not always available or affordable.

For this reason, a strategy for reducing emissions should focus on a range of solutions that can be implemented over time. This requires a dashboard of industrial policies to be assigned different degrees of priority and coordinated in their execution. These include: supply-side policies, to reduce investment costs and support the higher costs of ‘green’ production; demand-side policies, to stimulate the development of a market that can provide an outlet for ‘green’ production.

In this regard, as also emphasised in the Competitiveness Compass published last week by the European Commission, establishing a business case for ‘green’ products must take place through the creation of ‘lead markets’ that promote more sustainable products and are in line with the continent’s decarbonisation path. This would support domestic demand and the transformation of production processes towards less intensive production methods, starting with labelling systems or public demands through ‘green’ criteria for Green Public Procurement (GPP).

In Europe, public authorities spend over 14 percent of GDP annually—approximately 2 trillion euros—on purchasing goods, services and works, with a significant share allocated to construction materials. In 2019, in Italy, the GPP market represented 10.4 percent of GDP, or 186 billion euros. 26 percent of GPP expenditure was related to construction works alone.

Public procurements can promote products that are more aligned with sustainability, circularity and low-emission criteria, acting as a catalyst for the development of a private demand that integrates high environmental standards, thus accelerating the transition of production processes.

The new Commission’s work plan includes reforming the regulatory framework of the GPP at the EU level, a task that will be assigned to Commissioner Stéphane Séjourné.

Currently, within the EU, ‘green’ criteria for public procurement are not mandatory, while in Italy, the application of GPP is already mandatory for all public procurement.

A public procurement is considered ‘green’ when the tender documents include all the technical specifications and contractual clauses stipulated by the Minimum Environmental Criteria (Criteri Ambientali Minimi- CAM), and the winning proposal is based on the criterion of the most economically advantageous offer, based on best value for money.

Through the application of CAMs, public authorities can, to a certain extent, reduce the carbon and environmental footprint of the products they purchase. However, there are currently no explicit references to CO2 emissions from the production of construction materials. This leaves room for improvement, which could be useful to focus on in view of the upcoming revision of the European legislation. 

Regarding the identification of CO2 standards, at the European level, regulatory tools such as the ESPR (Ecodesign for Sustainable Products Regulation), the CPR (Construction Products Regulation) and the EPBD (Energy Performance of Buildings Directive) are introducing methodologies to assess emissions from the built environment based on Life Cycle Assessment (LCA) approaches.

In addition to these regulatory tools currently being defined, the European Taxonomy already establishes specific thresholds and reference values for emissions associated with the production processes of materials such as steel, cement and concrete. In fact, the European Taxonomy outlines specific technical screening criteria for each sector, setting both quantitative and qualitative thresholds related to direct emissions from production processes to determine sustainability in relation to climate change mitigation and adaptation goals.

In a policy brief on the revision of the CAMS for construction materials, ECCO, in collaboration with Fondazione Ecosistemi, has hypothesised adopting the technical screening criteria from the Taxonomy as minimum environmental criteria. Compared to LCA criteria, which are commonly used in GPP, the technical screening criteria offer a more accurate representation of emissions embedded in construction, at least regarding the production phase of materials. However, they lack information on the sourcing of raw materials, transportation, or emissions associated with the building’s service life, thus rendering the overall carbon footprint assessment of the building/structure less comprehensive. On the other hand, such a precise and easily applicable criterion may limit the emission reduction options and measures that can be evaluated to consider a product ‘green.’

The upcoming revision of the GPP directive will clarify the framework and potentially define the criteria for ‘green’ products. It will be crucial to monitor the developments of this regulation, which is now under public consultation until March 7. Regardless of the standard or method chosen for defining environmental criteria in public procurements, the key requirement for this regulation—if it is to be applicable, environmentally effective and economically viable, without creating excessive administrative burdens—is to ensure that systems ‘talk to each other’. This means that there should always be clear correspondences between the various calculation methodologies, and that their fields of application are always reconcilable.