3730 Access to the green market of tomorrow why and how green public procurement and life cycle costing can be a point of entry for businesses

Sune Kirkegaard Rotne , Environmental strategies, Danish Environmental Protection Agency, Copenhagen, Denmark
Justification of the paper:

Each year state, regions and municipalities in Denmark purchase for close to 27 billion Euros. At EU level the total amount of public procurement exceeds 2.000 billion Euros at an annual basis. Public procurement therefore provides a rather large market potential for businesses.

Purpose:

In 2008 the EU set an indicative target that 50% of all public tendering procedures should be green in the EU, where green means in compliance with common EU core criteria for green public procurement for ten product and service groups, such as construction, cleaning products, furniture and office IT equipment.

Theoretical framework:

A recent survey by the EU Commission, showed that within the defined ten product groups, as much as 44% of the public tendering contracts in Denmark included all the EU core green criteria, indicating a public demand for green products and services close to the 50%. The survey also showed that 45% of public procurers mostly evaluate contracts on purchasing costs, while only 10% mostly evaluate by applying life cycle costing/total cost of ownership calculations.

Results:

Two separate web-based tools are being developed by the Danish Environmental Protection Agency which respectively aims at helping businesses to comply with the EU core green criteria for public procurement and increase the use of life cycle costing as common evaluation criteria for contracts. The tools are therefore also to be seen as supporting the general EU strategy for green public procurement and in particular providing concrete measures on how to reach the indicative target of 50%. Furthermore, the tools will co-exist with and underpin other national initiatives in Denmark, specifically The Partnership for Green Public Procurement, initiated in 2008 by the Danish Ministry of Environment together with the three largest municipalities and The Forum on Sustainable Procurement, which was established by the Ministry of Environment in 2010, bringing together public and private purchasers.

The tool addressing the EU green criteria for public procurement is developed as a self assessment checklist for five product groups (furniture, office IT equipment, textiles, construction and copying/graphic paper), where the often complex criteria are translated into easy to understand questions, which can be answered by ‘yes’ or ‘no’. This way a company can test whether and to what level their products are in compliance with the criteria for green public procurement. Based on the results the tool will provide a set of recommendations for concrete improvements. 

The LCC tool will work as a point of entry to the already existing calculation models available. The tool will thus focus more on convincing businesses and purchasers alike about the benefits of applying life cycle costing when evaluating incoming tenders, for example by illustrating best practice case examples.

Conclusions: The tools are part of larger web based toolbox aimed at ensuring that Danish businesses and especially SMEs expand their voluntary environmental efforts.