29 July 2010

Smart purchasing to save costs, drive eco-innovation

© Juan Fuertes
© Juan Fuertes
Calculating the real cost of a purchase over a product's lifetime and how much it can contribute to municipal climate change strategies has now been made easier for public sector representatives in Europe.

More than 100 public procurers from Germany and the United Kingdom have been trained to use the new Life-cycle Costs and Carbon Dioxide Emissions Assessment Tool, developed by researchers partnering in the EU's Intelligent Energy for Europe funded project SMART SPP.

"Excellent tool, very keen to progress to adoption," says Wendi Wheeler, Energy Manager, Redcar and Cleveland Borough Council, United Kingdom.

The assessment tool is one of several tools that exist to encourage sustainable procurement, however it is one of few which integrate both economic and greenhouse gas emission aspects.

SMART SPP project promotes the introduction of new, innovative low carbon emission technologies and integrated solutions onto the European market.

This is done by encouraging early market engagement between public authority procurers and suppliers and developers of new innovative products and services in the pre-procurement phase of public tenders.

Reducing footprint, saving money

Procurers, requisitioners, carbon managers and energy managers can find out the real cost of a good or service - particularly if it is one that is not yet widely available on the market or so-called emerging technologies - and its associated carbon dioxide emissions, and include these in procurement decisions.

The tool can also serve as an instrument for public sector users to make real financial savings as it not only gives them a chance to assess the environmental savings that can be made, but also the real cost of products across their life-cycles.

Life-cycle costs cover purchasing, operating (energy, spares, maintenance) and end of life costs, such as the removal and disposal, of a product.

By making more informed choices, local governments, for instance, can make material and energy resource savings, reduce waste and pollution and potentially also make financial savings by purchasing products and services that have been produced in a more environmentally-conscious way.

An avenue to open up green markets

Each year European public authorities spend the equivalent of 16 percent of the EU Gross Domestic Product - staggering EUR2,000 billion annually - on the purchase of goods, such as office equipment, building components and transport vehicles; services, such as buildings maintenance, transport services, cleaning and catering services and works. This potential of public procurement has only been marginally exploited.

Tapping into the public purchasing power of the EU public sector for sustainability and innovation purposes is one of the avenues that will open up green markets and encourage eco-innovation among producers, thereby boosting their competitiveness.

With a new research and innovation strategy expected this September, the European Commission promises to lay out a detailed plan for using public sector purchasing power to foster innovation.

The Commission has already published a guide which shows how a life cycle approach can be used to identify and reduce the environmental and health impacts of the products we use.

The information in the brochure Making Sustainable Consumption and Production a Reality is aimed at helping both the public and private sectors make more informed decisions to achieve better environmental outcomes through better policies, business strategies, product design and better customer choice.

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