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Public procurement for clean vehicles
Public procurement refers to the process by which public authorities, such as government departments or local authorities, purchase work, goods or services from companies. In the context to a transition to carbon-neutral economy, public procurement is seen as an important tool to stimulate innovation and promote competitiveness and growth of industries, as public procurement accounts for a significant part of national GDP. Through public procurement, demand for sustainable technologies is increased, triggering effects across the product’s value-chain, thereby supporting the development of economies of scale and innovation. Specifically, to the transport sector, public procurement can also support the development of refuelling infrastructure.
All public procurement procedures in the EU are carried out on the basis of national rules. For higher value contracts, these rules are based on general EU public procurement rules. The value limits (thresholds) that mark when EU rules are used depend on the subject of the purchase, and who is making the purchase.
Usually, all medium and higher value contracts must be awarded through competitive procedures (tenders), although there are exclusions and exceptions, such as purchasing real estate, cases of extreme urgency, and situations where there is only one possible supplier.
The main limits are:
- €139 000 for most types of services and supplies purchased by central government authorities;
- €5 350 000 for construction contracts;
Detailed public procurement thresholds or limits can be verified in the respective national rules. For lower value tenders, only national public procurement rules apply but the general EU principles of transparency and equal treatment should be respected.
The Clean Vehicle Directive (CVD) (Directive 2009/33/EC, amended in 2019 by Directive (EU) 2019/1161) sets procurement targets expressed as minimum percentages of clean vehicles in the total number of road transport vehicles covered by the aggregate of all contracts referred to in article 3, awarded between 2nd August 2021 and 31st December 2025, for the first reference period, and between 1st January 2026 and 31st December 2030, for the second reference period. The Directive only applies to such contracts for which the call for competition has been sent after 2nd August 2021 or, in cases where a call for competition is not foreseen, where the contracting authority or contracting entity has commenced the procurement procedure after that date.
Definitions:
Clean LDVs are M1 (passenger cars), M2 (small bus), or N1 (pickups and vans) category vehicles emitting a maximum of 50g CO2/km for the first reference period and emitting 0 g CO2/km for the second reference period.
Clean HDVs are M3 (buses), N2 or N3 (trucks) category vehicles using alternative fuels as defined in points (1) and (2) of article 2 of Directive 2014/94/EU. This includes: electricity; hydrogen; biofuels as defined in point (i) of article 2 of Directive 2009/28/EC; synthetic and paraffinic fuels; natural gas, including biomethane, in gaseous form (compressed natural gas (CNG)) and liquefied form (liquefied natural gas (LNG)), and; liquefied petroleum gas (LPG). In the case of vehicles using liquid biofuels, synthetic and paraffinic fuels, those fuels shall not be blended with conventional fossil fuels.
Unlike legislation covering CO2 emission reduction targets for LDVs and HDVs, procurement targets are set for individual Member States respectively. For clean LDVs, targets are set for the first reference period. For clean HDVs, targets for the first and second reference periods for trucks (vehicle category N2 and N3) and buses (vehicle category M3), respectively. Detailed targets per Member State are to be found in Tables 3 and 4 of the Annex of the Clean Vehicle Directive.
Furthermore, the EU Green Deal Communication stated that public authorities, including the EU institutions, should lead by example and should ensure that their procurement is “green”, thus leading the shift towards sustainable consumption and production. As an example, public authorities’ purchasing power represented 16% of EU GDP in 2018 and it can serve as a powerful driver of the demand for sustainable products. To tap into this potential, the Commission has established the Green Public Procurement, which is a voluntary instrument to help public authorities use their purchasing power to choose environmentally friendly goods. The initiative includes a handbook and voluntary criteria for products and services. Among those are criteria for road transport, electricity, office and building design and road design.
In 2025 the Commission is aiming to launch a Communication on Greening Corporate Fleets, in order to establish a framework to update rules accelerating the move towards zero-emission mobility. Possible actions to accelerate this uptake could complement the implementation of existing rules on road transport emissions. The Commission is (in early 2024) in consultation phase.
What's in it for hydrogen?
Hydrogen could play an increasingly important role in public procurement. The required energy transition demands exemplariness from public institutions. Opportunities exist in a series of sectors where hydrogen can offer clean and cost-effective solutions. These above all include transport, for the purchase of vehicle fleet (buses, vans, cars, trains, boats...) by public authorities (state, regions, municipalities...) for various uses (professional vehicles for public agents, public transport network...) and the deployment of recharging and refuelling infrastructure.
Concretely, it is expected that public procurement of clean vehicles such as FCEV will benefit from a boost resulting from the above-explained policies. National targets in the CVD already give a signal as to which Member States are planning the highest efforts to green their fleet and will constraint Member State to integrate cleaner vehicles in their fleet as from 2021. The work for the uptake of Green Public Procurement planned by the European Commission includes more ambitious clean and verifiable criteria. Hydrogen could play an active role in this transition, particularly for vehicles for which hydrogen fuel cell is the most appropriate (buses, vans, taxi...).
Links to the original document and additional information:
Directive 2009/33/EC on the promotion of clean road transport vehicles in support of low-emission mobility (amended by Directive (EU) 2019/1161)
Directive 2014/24/EU on public procurement
Directive 2014/23/EU on the award of concession contracts
