The European Green Deal: what options are already available to contracting authorities?

The European Commission presented the European Green Deal on 14 July 2021. The European Green Deal comprises a set of proposals to change the EU’s climate, energy, transport and tax policies, which will most likely be adopted in 2023/2024. The proposals aim to achieve a 55% net reduction in CO2 emissions by 2030 compared to 1990. This blog addresses the key elements of the European Green Deal.

Key plans in the European Green Deal

  1. Expanding the scope of the ETS

An important proposal in the European Green Deal is the expansion of the scope of the European Emission Trading System (ETS). In the current system, industrial companies pay for rights to emit CO2, or must invest that money in cleaner production methods, to ensure that CO2 emissions are (permanently) reduced. Fewer emission rights become available every year, which makes investing in sustainability increasingly appealing. The plan is to expand the system to include petrol and energy companies. Motorists and households will therefore also be affected financially. The European Commission furthermore intends to make it compulsory for airlines and shipping to take part in the ETS.

  1. Introduction of a Carbon Border Tax

To prevent carbon leakage (the shifting of emissions to countries outside the EU), the European Commission intends to introduce a Carbon Border Tax, meaning that companies will have to pay a levy on the import of certain goods, such as iron, steel and cement. The amount of that levy will depend on the level of pollution caused by the production of those goods.

  1. Emission-free cars

The European Green Deal also aims to create an extra incentive for electric cars. Despite a great deal of resistance from the car industry, in Germany in particular, the Commission is proposing that cars and vans must be emission-free by 2035. The plan also calls for more charging points near motorways. The Commission furthermore wishes to levy a higher tax on diesel, in order to promote the use of biofuel.

  1. Use of biomass

The European Commission wishes to increase the share of renewable energy: by 2030, 40% of the total energy consumption should come from renewable sources. Achieving this ambitious target requires the use of biomass: energy generated by burning organic material. To protect Europe’s forests, however, strict requirements are set as to what constitutes “sustainable biomass”.

The role of contracting authorities in the European Green Deal

This package of green measures will not be accepted without a fight. Given the drastic nature of the measures, it is not inconceivable that some of the proposals will fail. The question nevertheless presents itself what will change in the coming years in the practice of contracting authorities and tenderers. And what can contracting authorities and tenderers currently do in the context of the European Green Deal? Contracting authorities are already developing many great sustainability initiatives. It is also clear that there is a great deal of willingness among contracting authorities to change their procurement practices. Will the European Green Deal further accelerate those sustainability developments?

Perhaps, but why wait until the new climate package has been adopted and implemented? As the European proposals show, sustainability can go beyond ambitions alone. Solutions to achieve sustainability targets can already be procured at a local, regional, national, European and international level. Public procurement law offers a suitable procedure for every need. Sustainable procurement may take place, for instance, via the traditional procurement procedures, but also by working together with the market (known as innovation partnerships).

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Martijn van de Hel

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