GREEN PUBLIC PROCUREMENT AND ITS TOOLS:MINIMUM ENVIRONMENTAL CRITERIA

ILARIA BAISI

1. Origins and development of Green Public Procurement in the EU legal framework.

With a view to pursuing sustainable development objectives in the award of public contracts as well, in 1996 the European Commission adopted a Green Paper aimed at ‘reconciling the protection of the free market with environmental and social policy’[1] . Although this was merely a piece of soft law, it demonstrated the emergence of a new institutional awareness regarding the potential of the ‘green procurement’ market for the protection of the ecosystem. In the subsequent 1998 White Paper[2] , the areas in which the public procurement directives allowed for environmental protection to be taken into account were further clarified.

The origins of Green Public Procurement (GPP), however, can be traced back to the Communication ‘Community law on public procurement and the scope for integrating environmental considerations into procurement’, in which the Commission set out to ‘analyse and highlight the possibilities that existing Community legislation offers public authorities to integrate environmental considerations into their procurement policy, and thereby contribute to sustainable development’[3] .

The Commission is also responsible for developing an Integrated Product Policy (IPP), aimed at promoting consistency in policy by encouraging measures designed to reduce environmental impact at those stages of the life cycle where they could be most effective[4] . In this way, the institution has ‘demonstrated the full compatibility of environmental considerations with public procurement rules, developing procedures in line with the regulations in force at the time’[5] , whilst at the same time inviting individual Member States to publish specific action plans by the end of 2006[6] .

At the same time, the European Court of Justice helped to define the scope of application of environmental considerations in public procurement. Although some openings could already be found in the case law of the 1990s[7] , the decisive turning point came with the judgment in Concordia Bus Finland Oy Ab v. Helsingin kaupunki and HKL-Bussiliikenne (C-513/99), in which the EU Court did not rule out ‘the possibility for the contracting authority to take environmental criteria into account when assessing the most economically advantageous tender’.

It was, however, with Directives 2004/17/EC and 2004/18/EC that ‘green procurement’ formally entered the EU regulatory framework. With a view to ‘promoting greater openness of public procurement to competition, whilst ensuring greater flexibility in award procedures’[8] , the European legislator expressly recognised the contracting authorities’ right to include non-economic considerations in tender procedures – subjecting their applicability, however, to the necessary connection with the subject matter of the contract, compliance with the fundamental principles of the EC Treaty and the prohibition on granting the contracting authority unconditional freedom of choice[9] . Whilst establishing procedural rules on ‘how to procure’, the EU institutions nevertheless left contracting authorities free to decide ‘what to procure’, with the result that the reluctance of contracting authorities to include environmental considerations in tender notices meant that the potential of GPP remained largely untapped for a long time.

To overcome this impasse, in 2008 the Commission adopted the Communication ‘Public Procurement for a Better Environment’: the first document directly focused on GPP, it provides the official definition and highlights the need to establish – through a formalised procedure – common criteria across the Union, to be made binding in individual national legal systems[10] . In the subsequent 2011 Green Paper[11] , the EU executive affirmed not only the capacity of ‘green procurement’ to steer production and consumption towards eco-efficient models, but also the need to progressively adopt the ‘what to buy’ approach, establishing mandatory requirements or incentives capable of guiding choices regarding the goods and services to be procured.

This approach was definitively enshrined in law through Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, in which ‘there is a clear maturing of environmental protection requirements, which have become a primary concern, including in the field of public procurement’[12] . Among the significant innovations, the introduction of the ‘life-cycle cost’ criterion stands out: on the basis of a novel ‘cost-effectiveness approach’, Article 68 of the Directive required contracting authorities to calculate both ‘internal costs’ (acquisition, production, transport, use, maintenance and end-of-life) and the so-called “external costs directly linked to the life cycle”, including greenhouse gas emissions and other negative externalities[13] .

In this way, the ‘lowest price’ criterion – although not formally abolished – was scaled back in favour of the ‘best value for money’ criterion, which is better suited to evaluating tenders from an environmental perspective as well. Subsequently, even these directives failed to regulate ‘what to buy’ within the context of green purchasing, and the use of ‘green procurement’ remained ‘optional, with contracting authorities free to choose not to adopt any environmental criteria’[14] .

In recent years, the role of ‘green contracts’ has gradually grown, due to three converging factors: the circular economy, the European Green Deal (EGD) and Next Generation EU (NGEU).

On the first front, GPP is among the most suitable market instruments for establishing a circular economic model: as early as the first Circular Economy Action Plan (CEAP), the Commission expressed its intention to promote its uptake and review its criteria, placing ‘particular emphasis on aspects inherent to the circular economy, such as durability and reparability’[15] . The 2017 Communication on Effective Public Procurement in and for Europe[16] then called for the development of an updated version of the GPP toolkit as well as tools for calculating life-cycle costs.

On the GDE front, the 2050 carbon neutrality target has incorporated circular economy policies into a broader challenge. The 2020 PAEC[17] sets out the principles of decoupling growth from resource consumption and of the ‘product as a service’, proposing the introduction of mandatory minimum GPP criteria and targets in sectoral legislation.

As for the NGEU, EU Regulation 2021/240 establishing the Recovery and Resilience Facility requires that 37% of resources be allocated to the ‘green transition’ and that the Do No Significant Harm (DNSH) principle be respected: all measures envisaged in the National Plans must not cause significant harm to the six environmental objectives set out in the so-called ‘Taxonomy’ (EU Regulation 2020/852). In this context, GPP becomes an indispensable tool, given that compliance with DNSH requires, in various areas, the use of environmental criteria[18] .

 

2. The use of minimum environmental criteria in national legislation.

Although the debate on ‘green procurement’ emerged in Italy a few years later than in the EU institutions, the first green purchasing policies in public administrations can be traced back to the mid-1990s.

The so-called “Ronchi Decree” required the Regions to ensure that at least 40 per cent of the annual paper requirement in public offices was met with recycled paper, whilst the 2002 Finance Act established the obligation to reserve at least 20 per cent of purchases for retreaded tyres. The initial approach, however, proved ineffective: in addition to achieving ‘largely disappointing’ results[19] , it raised uncertainties regarding the compatibility of national rules with EU directives and with the principles of the EC Treaty on free competition[20] .

The first real turning point came with the transposition of Directives 2004/17/EC and 2004/18/EC, implemented by Legislative Decree No. 163 of 12 April 2006 (the De Lise Code): in addition to transposing the green criteria in accordance with the procedures set out in the Directives, the Code mentioned environmental protection among the founding principles of the sector’s regulations and expressly recognised the possibility for contracting authorities to ‘green’ their contracts.

The wording of these initial provisions, however, by leaving it to individual administrations ‘to decide whether or not to opt for environmentally-oriented solutions’[21] , prevented the full implementation of the inclusion of environmental considerations in public procurement selection criteria for a long time[22] . Nevertheless, a paradigm shift was taking hold: the environment ceased to be perceived as a constraint on private economic initiative and came to be seen as a ‘public interest to be achieved necessarily through the very dynamics of competition’[23] .

In accordance with Article 1, paragraph 1126, of Law 296/2006, in 2008 the Ministry of the Environment, in consultation with the Ministers of Economy and Economic Development, drew up the first Action Plan for the Environmental Sustainability of Public Administration Consumption (PAN GPP)[24] .

The Plan – aimed at promoting the uptake of ‘green procurement’ by defining its strategy, objectives, methodological aspects and relevant product categories – identified the appropriate framework for determining minimum environmental criteria (CAMs) through a ‘cascading’ process: the legislator specifies the categories of goods to be subject to green criteria; the Ministry exercises its technical discretion by first adopting the PAN GPP and then implementing decrees that identify the MECs for product categories prioritised on the basis of environmental impact and expenditure volume[25] . In any case, these criteria represent ‘minimum’ measures: without prejudice to mandatory standards, nothing prevents contracting authorities from introducing more advanced criteria.

Over the years, 22 CAM decrees have been adopted; however, their significance has changed radically with Legislative Decree No. 50 of 18 April 2016 (Code 50), issued upon the transposition of the 2014 directives, which also incorporated the provisions of the so-called ‘environmental annex’ to the 2016 Stability Law[26] .

Code 50 ‘green-washes’ every stage of the tender procedure, from design to execution: environmental considerations feature in the general provisions (Articles 4 and 30), in the qualification criteria for contracting authorities (Article 38), in the technical specifications (Article 68), in labelling (Article 69), in the award criteria (Article 95) and in life-cycle costs (Article 96).

The key provision, however, is Article 34 of Legislative Decree 50/2016, which introduces a general obligation to use environmental clauses of a truly innovative scope – even more far-reaching than the EU directives, where the use of environmental criteria remains purely optional. Paragraph 1 enshrines the duty to conclude ‘green contracts’, requiring the inclusion in the project and tender documentation of ‘at least the technical specifications and contractual clauses contained in the minimum environmental criteria adopted by decree of the Minister for the Environment’[27] . Paragraph 2 extends the application of the CAMs to the award process as well, stipulating that the award criteria must be taken into account when applying the criterion of the most economically advantageous tender[28] . Paragraph 3 – introduced by the ‘corrective’ Decree No 56/2017[29] – specifies that the obligation applies to contracts of any value, regardless of EU thresholds, for all categories covered by CAM decrees.

At the same time, a central role in steering public spending towards sustainability is entrusted to the criteria of ‘best value for money’ and ‘life-cycle costs’, in accordance with Directive 2014/24/EU. This makes it possible to overcome the potential competitiveness constraints faced by companies investing in sustainable technological innovation, although such costs must be measured using objective and non-discriminatory methods, so as to ‘avoid distortions of competition’[30] .

Turning to Legislative Decree No. 36 of 31 March 2023 (Code 36), issued within the framework of the National Recovery and Resilience Plan (PNRR), the legislator has not only confirmed the previous approach in the new Article 57(2), but has placed it amongst the ‘cross-cutting’ provisions of Part II of Book II, common to all contracts[31] . The purpose of the mandatory nature of the CAMs ‘lies in the need to ensure that national policy on green public procurement aims to reduce environmental impacts, as well as to promote more sustainable production and consumption models’[32] .

As regards the bonus criteria, there are no particular innovations: these continue to be simply ‘taken into account’ in the application of the award criteria, without the legislation establishing a strict correspondence between the CAM criteria and the bid evaluation criteria in the lex specialis[33] . The most significant change, however, lies in the possibility of defining differentiated CAMs based on the tender value, where technically appropriate: Code 36 thus addresses the needs of small and medium-sized enterprises – all too often excluded from the public procurement market due to criteria unsuited to their production capacity – as well as those of contracting authorities required to comply with stringent conditions even for purchases of modest value.

Finally, it should be noted that paragraph 3 of the previous Article 34, which explicitly established the mandatory nature of CAMs for contracts of any value, has not been reintroduced. Nevertheless, taking into account the systematic placement of Article 57(2) and the hierarchically superior principles (Article 11 TFEU; Articles 9 and 41(3) of the Constitution; Article 3-quater(2) of Legislative Decree No. 152 of 3 April 2006), as well as the provision that, unless otherwise provided, the provisions of the Code apply to contracts below the threshold (Article 48, (3) of Legislative Decree 36/2023), it is not plausible to consider that the new wording allows public authorities to evade the objectives of the GPP National Action Plan (PAN GPP)[34] entirely.

As things stand, therefore, contracting authorities must continue to apply Green Public Procurement, leaving the provision of any derogations or contrary provisions to specific ministerial decrees[35] .

 

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[1] Communication from the European Commission, Public Procurement in the European Union: Points for Reflection, 27 November 1996, 583 final.

[2] Communication from the European Commission, Public procurement in the European Union, 11 March 1998, 143 final.

[3] Communication from the European Commission, 4 July 2001, 274 final, p. 1.

[4] Communication from the European Commission, Developing the concept of the environmental life cycle, 18 June 2003, 302 final.

[5] O. Hagi Kassim, Green procurement, in G. Rossi (ed.), Environmental Law, 5th ed., Turin, 2021, p. 509.

[6] COM (2003) 302 final, point 5.3, box 3, letter a).

[7] The reference is primarily to the judgment in Commission of the European Communities v Federal Republic of Germany (C-318/94), 28 March 1996.

[8] B. Fenni, Green public procurement as a tool for sustainable development, in AmbienteDiritto.it, 2014, p. 7.

[9] O. Hagi Kassim, Green procurement, op. cit., p. 510.

[10] Communication from the European Commission, Public procurement for a better environment, 16 July 2008, 400 final, p. 6.

[11] Communication from the European Commission, On the modernisation of EU public procurement policy, 27 January 2011, 15 final.

[12] O. Hagi Kassim, Green Procurement, op. cit., p. 511.

[13] M. Cocconi, The Regulation of the Circular Economy. Sustainability and New Development Paradigms, Milan, 2020, p. 75.

[14] O. Hagi Kassim, Green Procurement, op. cit., p. 511.

[15] Communication from the European Commission, Towards a Circular Economy: A Roadmap to a Zero-Waste Europe, 2 July 2014, 398 final, p. 3.

[16] Communication from the European Commission, 30 November 2017, 572 final, p. 4.

[17] F. Raspadori, The European Union’s contribution to the reconstruction of the concept of the circular economy, in Dir. Unione eur., 3-4, 2021.

[18] See Ministry of Economy and Finance, Operational Guide for compliance with the principle of ‘Do No Significant Harm’ (DNSH), updated edition attached to Circular RGS No 22 of 14 May 2024, p. 21.

[19] G. Bellomo, Green Public Procurement in the Multi-level Environmental Legal Order, in Dir. pubbl. comp. eur., 2, 2008, p. 947.

[20] M. Ventura, ‘Green Public Procurement as an Active Tool of Environmental Policy’, in G.M. Caruso, D. D’Alessandro, D. Pappano (eds.), Public Sector Contracts: Current Issues, Turin, 2019, p. 449.

[21] O. Hagi Kassim, Sustainability Criteria, op. cit., p. 13.

[22] A. Farì, The Strategic Use of Public Contracts, in M. Cafagno, F. Manganaro (eds.), Public Intervention in the Economy, Florence, 2016, pp. 455–456.

[23] M. Cocconi, The Regulation of the Circular Economy, op. cit., p. 81.

[24] Originally adopted by Ministerial Decree No. 135 of 11 April 2008 and subsequently updated by Ministerial Decree of 10 April 2013, it was definitively repealed by Ministerial Decree of 3 August 2023. The Plan is now ‘designed to implement the paradigms of the green transition and the circular economy within the production system, as well as to support innovation in terms of products, processes and business models’ (PAN GPP, p. 15).

[25] F. De Leonardis, The strategic use of public procurement: between GPP and the mandatory nature of CAMs, in Riv. quadr. dir. amb., 3, 2020, p. 79.

[26] See Articles 16–22 (Title IV – Provisions relating to Green Public Procurement), Law No. 221 of 28 December 2015.

[27] O. Hagi Kassim, Sustainability Criteria, op. cit., p. 21.

[28] Article 34(2) of Legislative Decree 50/2016.

[29] M. Ventura, op. cit., p. 457.

[30] M. Cocconi, A Law for the Circular Economy, op. cit., p. 144.

[31] Pursuant to Art. 141(3)(e), Art. 57 also applies to contracts in the so-called ‘special sectors’.

[32] Council of State, Section V, 10 November 2022, No. 9879.

[33] Council of State, Section III, 17 April 2018, No. 2317.

[34] With regard to standing to challenge, case law has clarified that the omission of the CAMs from the tender notice does not constitute a clause directly preventing participation: after all, as noted by the Council of State, Section V, No. 9879/2022, ‘even if not formally referred to, they must be deemed to be incorporated in substance into the tender law, given that their absence does not entail a defect of legality in the lex specialis of the tender but merely a formal deficiency’. According to the majority of case law, such clauses must therefore be challenged by the tenderer together with the final act of the tender procedure.

[35] In line with current practice for renovation contracts, including those involving demolition and reconstruction: the CAMs are taken into account, as far as possible, depending on the type of work and the location of the works to be carried out, ‘on the basis of the provisions of the relevant minimum environmental criteria relating to building works’ (amendment introduced by Law No. 105 of 18 July 2025).