Letter to Frans Timmermans: The CO2 Performance Ladder – the instrument for green public procurement in Europe

The European Commission has put forward plans with the Green Deal to combat climate change. The Green Deal is intended to ensure that the European Union becomes climate neutral by 2050. To achieve this objective, a road map is being drawn up with a package of measures for a sustainable energy transition. SKAO would like to contribute to the Green Deal with the CO₂ Performance Ladder and has written a letter to Frans Timmermans, Vice-President of the European Commission. The Ministry of Infrastructure and Water Management has written a accompanying letter in which it endorses the importance of the CO₂ Performance Ladder.

Dear Mr Timmermans,

We have studied the European Green Deal with a great deal of enthusiasm, and we are pleased to see Europe taking a leading role in tackling climate change. The European climate plans establish a solid point of departure for the transition to full carbon neutrality in Europe by 2050.

The European Green Deal, published by the European Commission at the end of last year, states that 'Public authorities, including the EU institutions, should lead by example by ensuring that their procurement is green. The Commission will propose further legislation and guidance on green public purchasing.'As the owner and manager of the CO₂ Performance Ladder, SKAO (the Foundation for Climate Friendly Procurement and Business) wishes to make a contribution to these proposals.

Harnessing the 'power of procurement' to achieve climate objectives

Green Public Procurement (GPP) is a vital driver of innovation and gives companies a powerful incentive to do business in a sustainable manner, especially in sectors in which public authorities have a substantial market share (such as construction, healthcare and infrastructure)[i]. Boosting the sustainability of public procurement in Europe will help to solve many problems all at once: greater attention will be paid to the environment and climate change, and it will stimulate growth for sustainable businesses. GPP is a crucial part of any green economy.

Every year, European government bodies spend around EUR 1.8 trillion, which represents approximately 14% of the EU's GDP[ii]. Although GPP is considered an effective policy instrument in the fight against climate change, many European countries are still encountering a number of obstacles that are hindering the implementation of this kind of policy[iii]. The main obstacles in this regard are insufficient political support, the perception that GPP is expensive, low levels of GPP expertise and the lack of practical instruments.

Sustainable infrastructure in the Netherlands

The infrastructure sector is a vital part of the Dutch economy. It contributes a substantial proportion of the country's gross domestic product (around 4%) and generated turnover of over EUR 67 billion in 2018. The sector can be subdivided into Residential property, Non-residential property and infrastructure, with the infrastructure sector generating approximately EUR 18 billion in turnover in 2018, as well as providing 55,000 full-time jobs (around 15% of all jobs in the construction sector). In addition to turnover and job opportunities, the Dutch infrastructure sector also provides the vital infrastructure that the country requires to ensure effective mobility and a well-functioning society.

The Green Deal for Sustainable Infrastructure was formulated to help the Dutch government during the transition to more sustainable infrastructure projects. For this purpose, a uniform set of practical instruments was developed[iv], such as the CO₂ Performance Ladder.

The CO₂ Performance Ladder: doubling CO₂ reduction

Over the past ten years, the CO₂ Performance Ladder has developed into the most important GPP instrument in the Netherlands, helping businesses and government bodies to achieve ambitious and structural CO₂ and cost reductions within their business operations, during projects and in the chain. In the infrastructure sector, the CO₂ Performance Ladder has brought about a sustainable revolution, and its success has not gone unnoticed further afield: sectors such as IT, facilities services, landscaping and waste management have already implemented the Performance Ladder.

The Ladder has a dual function, serving as both a CO₂ management system and a GPP instrument. Over 3,000 businesses in the Netherlands have already been certified on the CO₂ Performance Ladder as a carbon management system, and over 150 public authorities (including Rijkswaterstaat, ProRail and various decentral government bodies) are using the CO₂ Performance Ladder for tendering processes as a GPP instrument. Research by SKAO shows that the CO₂ Performance Ladder is used for one in ten European tendering processes in the Netherlands[v].

During tendering processes, public authorities using the CO₂ Performance Ladder as a GPP instrument give advantage to sustainable tenders. The greater the company's level of ambition with regard to sustainability, the greater the advantage they receive. The five ambition levels are in line with the five levels of certification that companies can obtain, enabling government bodies to reward companies that actively work to reduce the carbon footprint of their business operations. Tendering processes involving the CO₂ Performance Ladder are in line with European tendering rules.

Any type of company can obtain a certificate on the CO₂ Performance Ladder. This certificate demonstrates that the organisation has insight into its emissions, that ambitious objectives and measures are in place to reduce these emissions, that structural communication and collaboration is conducted in this area and that the organisation is continuously improving.

Scientific research shows that certified organisations reduce their CO₂ emissions at twice the rate of uncertified organisations[vi]. The research also shows that by using the CO₂ Performance Ladder, all of the companies under investigation have implemented a fully fledged energy management system, which includes structural monitoring of emission trends and establishes reduction of CO₂ as a key business strategy.

The CO₂ Performance Ladder on the international stage

The success of the Ladder as a CO₂ management system and a GPP instrument has also caught the attention of many on the international stage. Examples of this international acknowledgement include the OECD recognising the CO₂ Performance Ladder as a Best Practice for sustainable procurement and the Belgian government launched a three-year pilot to implement the Ladder as a GPP instrument. Furthermore, knowledge is regularly exchanged with (local) governments, businesses and NGOs in other European countries who are interested in this innovative Dutch instrument. In the Netherlands, the CO₂ Performance Ladder is also an alternative means of complying with the Energy Efficiency Directive (EED).

We would be very happy to work with the European Commission to explore the opportunities that a proven and practical instrument such as the CO₂ Performance Ladder could offer in relation to Green Public Procurement and the European Green Deal. We bring to the table a decade of experience with this instrument, including experience with roll-outs in other countries.

We would greatly appreciate the opportunity to further explain all of the above in a face-to-face meeting.

On behalf of the SKAO board,

Kind regards,

Dimitri Kruik

Chairman of the Board of SKAO

[i] Buying Green. A handbook on green public procurement (2016).

[ii] https://ec.europa.eu/environment/gpp/what_en.htm (2019).

[iii]https://ec.europa.eu/environment/gpp/benefits_en.htm (2016).

[iv]Toekomstige Opgave Rijkswaterstaat: Perspectief op de uitdagingen en verbetermogelijkheden in de GWW-sector[Rijkswaterstaat's Future Mission: Perspective of challenges and possible improvements in the GRH sector] (2019)

[v] Monitor aanbestedingen en opdrachtgevers CO₂ -Prestatieladder [Monitor of Tendering Procedures and Clients using the CO₂ Performance Ladder], Significant and SKAO (2016)

[vi] Improving energy and carbon management in construction, Rietbergen et. al (2016)