Harnessing Public Procurement for the Green Transition

New Zealand

Framework, scope, action-plans

In New Zealand, GPP is part of a wider national strategy to accelerate the reduction of emissions within the public sector, which is also known as the Carbon Neutral Government Programme or CNGP (2020). Most relevantly, public procurement is mentioned as a key leverage to achieve two priorities:

1. Phasing out coal-fired boilers from the public sector, with the target of removing the largest and most active coal-fired boilers by the end of 2025;

2. Optimising the size of agencies’ car fleets and promoting the purchasing of electric vehicles or plug-in hybrids (when full electric is not appropriate, unless this is not possible due to operational requirements).

The green procurement element of the CNGP was last revised in 2022 to include the requirement for Green Star rating for government buildings.

The regulatory framework governing the public procurement system (i.e. Government Procurement Rules) in New Zealand aligns with the CNGP, therefore facilitating the implementation of these two priorities. Moreover, it envisages the general requirement to seek public value through procurement operations and activities, including environmental benefits and reduction of emissions.

Implementation

The Government Procurement Rules in New Zealand set out the requirement to integrate environmental considerations in procurement procedures, across all levels of government and for all contracts that meet or exceed the value threshold of NZD 100 000 (excluding GST).

Most notably, Rule 20 requires contracting authorities to include a set of minimum environmental requirements in designated contract areas (i.e. office supplies, light vehicles, stationary/process heating systems), when purchasing through collaborative contracts - also known as All-of-Government contracts, which are managed by the New Zealand Government Procurement.

• For office supplies, agencies need to purchase items that produce low amounts of waste and/or are recyclable;

• For light vehicles, agencies need to choose a battery electric vehicle (BEV), or a plug-in hybrid electric vehicle (PHEV) if a BEV is not appropriate for the proposed use, unless there are operational requirements or other circumstances that prevent them from doing so. The New Zealand Government has a goal that, where practicable, its fleet should be emissions free by 2025/26;For stationary/process heating systems, agencies need to ensure that they are buying a low emission heating option. Agencies must not purchase coal boilers and should not invest in any other kind of fossil-fuelled boiler (such as natural gas or LPG).

To support the implementation, the New Zealand Government Procurement (NZGP) has developed guidance documents and GPP criteria that contracting authorities can refer to in public tenders, especially to achieve objectives such as reduction of emissions or waste.

In addition to the obligations envisaged in the Government Procurement Rules, the CNGP requires procurement-mandated organisations, when constructing a new government owned non-residential building, to achieve a minimum 5 Green Star rating for projects with a capital value of USD 25 million and over from 1 April 2022, and for projects with a capital value of NZD 9 million and over from 1 April 2023. Accordingly, the NZGP requires organisations to use an approved sustainable building rating system for new government-owned non-residential buildings.

Moreover, in 2022, it has published a practical guidance to support emissions reduction in buildings and construction (i.e. the Procurement Guide to Reducing Carbon Emissions in Building and Construction).

Measurement and impact

Public organisations are required to report on the use of GPP in public contracts through excel files, e-mails, or other paper-based forms. They are also required to report on their progress on environmental outcomes, such as reduction in average vehicle emissions from government fleet, reduction in emissions stemming from government-owned buildings, reduction in consumption of “single-use” items (e.g. paper, plastic pens, etc.). The reporting on environmental outcomes is conducted through digital systems.

Moreover, as part of the CNGP, public organisations need to measure and report, on an annual basis, on their performance in terms of emissions reduction, including from procurement operations and activities. Data is then collated, analysed, and shared with CNGP Ministers. Subsequently, it is made publicly available.