Green public procurement
With green procurement, public authorities and/or companies take sustainability issues into account when tendering for goods and services. In the transport sector, green procurement generally refers to accounting for the environmental efficiency of vehicles when making vehicle purchase/lease decisions. Green public procurement can directly target vehicle CO2 emissions and/or other environmental impacts of vehicles (local pollutants, for example). Public procurement includes both (a) transitioning public transport or other passenger and logistics fleets to greener options and (b) establishing purchase programs where public entities purchase vehicles for resale for private use.
The CO2 benefits from public procurement accrue primarily from to the transition from petrol or diesel vehicles to low- or zero-emissions vehicles (LZEVs). In the case of transitioning to electric vehicles, the gains are most significant in areas where electricity is produced from renewable energy sources. Many cities and bus operators worldwide are committing to drastic increases in fully low- or zero-emissions bus fleets – for example, London, UK (via Transport for London’s contract with Stagecoach London), and several cities in the Netherlands, India, Chile, and Colombia. Municipalities in Sweden that use electric vehicles for public works or transport have seen higher EV adoption rates in their communities. Increasing visibility and demonstrating the effectiveness of the technology allows authorities to lead by example. A Swedish study shows a larger effect in rural/smaller municipalities where the ‘neighbourhood effect’ of localised social networks may give EVs greater attention and visibility. However, it is not confirmed whether this effect is causal or simply correlational due to more environmentally minded municipalities adopting EVs in the private and public sector.
The TCAD measure on ‘Electric vehicle delivery fleets’ provides more info on the impacts of electrifying the urban logistics fleet.
Public procurement of LZEVs can also play a role in stimulating the initial demand needed for automakers to increase the availability of EVs on the market and in reducing the typically higher upfront costs. Public programs provide an incentive for the initial investments in publicly accessible charging infrastructure – often a barrier to uptake for private use. Public programs to purchase EVs for resale for private use can also facilitate a second-hand market for EVs. By collaborating with other authorities or regions, smaller organisations can aggregate purchasing power and expertise. Examples in practice include the collaboration between several transit authorities in California and Washington State (USA), India and Sweden.
Public procurement often needs complementary measures to make the scheme successful in encouraging private vehicle uptake. Prioritising the availability of charging infrastructure, encouraging purchase incentives in the private sector, and establishing differential fees or waivers for parking and tolls can all improve the effectiveness of the strategy. It is also important to consider the equity effects of private-vehicle subsidies; ideally, they should be made available only for the purchase of low- and medium-priced vehicles. Please see the respective measures available on TCAD to learn more about their impacts and costs.
The CO2-mitigation effects of green public procurement schemes come mainly from replacing petrol/diesel vehicles with low- or zero-emission fleets. The CO2 benefits largely depend on the size of the fleet that is subject to the procurement criteria, the stringency of the environmental criteria, and the life-cycle CO2 impact differential between the vehicle that is procured thanks to the procurement program and the one that would have been procured otherwise. Impacts will therefore depend not only on the exact scheme design, but also on the local context and the vehicles chosen.
The overall costs of green public-vehicle procurement depends on i) the number of vehicle purchases that are subject to the policy, ii) the stringency of the procurement criteria, and iii) the total cost of ownership differential between vehicles that meet the procurement criteria and those that would have been purchased without a green procurement policy in place.
Because LZEVs are becoming increasingly affordable (existing studies suggest that upfront cost parity with conventional vehicles is possible before 2030) and operational expenses for energy-efficient road vehicles are typically lower, green procurement programs can increasingly be expected to become cost-negative (i.e. they incur financial benefits rather than costs). Please see the measure on LZEV mandates on TCAD for a discussion on the cost comparison between LZEVs and their conventional counterparts.
- An advantage of public procurement can be in encouraging and stimulating the entry of LZEVs into the market — both in passenger transport and private use vehicles.
- Increasing demand can increase the availability of LZEVs in the future, and makes them more affordable to manufacture and purchase due to economies of scale.
- In addition to the CO2 impacts, the air pollution benefits of EVs are significant.
- Challenges to public procurement include the difficulty of collaborating with joint procurement partners; new contractual agreements bring uncertainty and can be a time-consuming process.
- Financially, if an authority is purchasing vehicles for resale as private vehicles, there is often a financial loss incurred. There is limited evidence that public procurement for private use is an efficient policy measure compared to rebates/subsidies.
- LZEV uptake should be supported by a roll-out of the required respective recharging/refuelling infrastructure for these vehicles (see the respective measures available on TCAD in this context).
ITF (2021) Transport Climate Action Directory – Green public procurement
https://www.itf-oecd.org/policy/green-public-procurement
ITF (2020), Electrifying Postal Delivery Vehicles in Korea, https://www.itf-oecd.org/sites/default/files/docs/electrifying-postal-delivery-vehicles-korea_0.pdf.
Aldenius, M. and J. Khan (2017), Strategic use of green public procurement in the bus sector: Challenges and opportunities, https://doi.org/10.1016/j.jclepro.2017.06.196.
Auckland Transport (2018), Electric Bus Trial, https://at.govt.nz/about-us/sustainability/electric-bus-trial (Accessed: 30 October 2019).
Auckland Transport (2018), Low Emission Bus Roadmap Dec 2018, https://at.govt.nz/media/1980070/low-emissions-bus-roadmap-dec-2018.pdf.
C40 (n.d.), Fossil Fuel Free Street Declaration, https://www.c40.org/other/green-and-healthy-streets (Accessed: 26 June 2020).
C40 Cities Climate Leadership Group, Financing Sustainable Cities Initiative (2019), How to shift your bus fleet to zero emission by procuring only electric buses, https://www.c40knowledgehub.org/s/article/How-to-shift-your-bus-fleet-to-zero-emission-by-procuring-only-electric-buses?language=en_US (Accessed: 30 October 2019).
European Commission (2015), Ex-post Evaluation of Directive 2009/33/EC on the promotion of clean and energy efficient road transport vehicles, http://ec.europa.eu/transport/sites/transport/files/facts-fundings/evaluations/doc/2015-09-21-ex-post-evaluation-directive-2009-33-ec.pdf.
European Commission (n.d.), Joint National Procurement of Electrical Vehicles in Sweden, https://ec.europa.eu/environment/gpp/pdf/news_alert/Issue24_Case_Study53_Sweden_EV.pdf.
Gies, E (2013), “In Europe, Greener Transit on Existing Infrastructure”, https://www.nytimes.com/2013/07/08/business/energy-environment/greener-transit-in-europe-built-on-top-of-older-infrastructure.html?_r=3& (Accessed: 30 October 2019).
Gorner, M, Scheffer, S, and Cazzola, P (2019), Electric vehicles, https://www.iea.org/tcep/transport/electricvehicles/ (Accessed: 30 October 2019).
Ho, L., N. Dickinson and G, Chan (2010), Green procurement in the Asian public sector and the Hong Kong private sector, https://doi.org/10.1111/j.1477-8947.2010.01274.x.
IEA (2019), Global EV Outlook 2019: Scaling-up the transition to electric mobility, https://doi.org/10.1787/35fb60bd-en.
ITDP (2018), “China Tackles Climate Change with Electric Buses”, https://www.itdp.org/2018/09/11/electric-buses-china (Accessed: 30 October 2019).
Kuiper, D. (2016), The national procurement of electric vehicles: the Swedish example, https://www.eltis.org/discover/case-studies/national-procurement-electric-vehicles-swedish-example (Accessed: 30 October 2019).
OECD (2014), Smart Procurement Going green: best practices for green procurement – United States, http://www.oecd.org/gov/ethics/gpp-procurement-USA.pdf.
Palm, J. and F. Backman (2017), “Public procurement of electric vehicles as a way to support a market: Examples from Sweden”, International Journal of Electric and Hybrid Vehicles 9(3):253, https://doi.org/10.1504/IJEHV.2017.087587
Piltaver (2012), Implementation status report on hybrid vehicles, ELAN Deliverable No. 1.12-D1, http://www.civitas.eu/sites/default/files/1_12_d1_implementation_status_report_on_hybrid_vehicles.pdf
Sustainable Bus (2019), Electric bus, main fleets and projects around the world, https://www.sustainable-bus.com/electric-bus/electric-bus-public-transport-main-fleets-projects-around-world/
Trosvik, L. and F. Egner (2017), Electric vehicle adoption in Sweden and the impact of local policy instruments, https://www.nordicenergy.org/wp-content/uploads/2017/10/gupea_2077_53160_1.pdf
Xylia, M. and S. Silveira (2017), On the road to fossil-free public transport: The case of Swedish bus fleets, https://doi.org/10.1016/j.enpol.2016.02.024
Printer-friendly version