With the backdrop of ambitious climate targets and a growing emphasis on sustainability, the approach to procurement in the infrastructure industry is undergoing a significant transformation. The Government’s Green Public Procurement (GPP) Policy is an important milestone towards incorporating green and circular procurement practices, but the infrastructure sector will need further guidance on implementation to strengthen the policy's impact, secure its optimal uptake, and address potential shortfalls.
What should the infrastructure market expect? Jenna Davis and our Infrastructure team outline the changes below.
Key considerations
New criteria, measures and monitoring
Broadly green procurement can be summarised into 3 categories; carbon accounting, social value and value for money. The financial case for investment still needs to deliver efficient and effective infrastructure however carbon emissions and social value now need to carry similar weighting to cost.
This is reflected in the updated Infrastructure Guidelines that now include a requirement for assessment of climate and environmental performance as part of the strategic assessment and preliminary business case. Monitoring these measures in the future will see opportunities to use AI and automated methods to deepen the understanding of sustainability outcomes in relation to the built environment.
Upskilling
The procurement functions will need support implementing green procurement and would benefit with strong links with the market. Engagement similar to complex procurement approaches such as competitive dialogue to develop realistic green criteria and utilising collaborative contracting models such as alliancing or risk sharing contracts to ease the upfront investment by the delivery contractors.
Incentives
Investment in sustainable infrastructure is a clear priority for Ireland. Incentives for the supply chain and private sector to invest and innovate in a commercially viable manner needs to be considered and implemented as part of the procurement process in order to drive design requirements and inject the market with innovation and new methods of infrastructure delivery.
Public bodies will need to prioritise integrating GPP criteria into procurement processes and establish systems to measure and monitor progress in achieving targets.
In Ireland, the importance of sustainable practices is gaining prominence, particularly in sectors critical for national development, such as infrastructure. In 2022, the built environment, which comprises the residential, public, and commercial sectors, accounted for 11.1% of Ireland’s greenhouse gas (GHG) emissions, highlighting the importance of GPP in the infrastructure sector and setting GPP criteria for the design construction, renovation, retrofitting, demolition and management of buildings.
This was reflected in the Department of The Environment, Climate and Communications (DECC) ‘Buying Greener: Green Public Procurement Strategy and Action Plan 2024-2027’ which was published on 4 April 2024 (GPP Action Plan). Public bodies will need to prioritise integrating GPP criteria into procurement processes and establish systems to measure and monitor progress in achieving targets.
What’s coming
The objectives of the GPP Action Plan are to drive the implementation of green and circular procurement practices across the public sector, emphasising the significant influence public procurement has in stimulating the creation and provision of more resource-efficient goods and services. GPP as a tool for transitioning to a sustainable, circular, and low-carbon economy, ensuring its integration into the procurement process and associated governance structures.
What it means for Infrastructure
The outlined targets and actions have significant implications for the Irish infrastructure sector. The push towards low carbon construction methods signifies a shift towards sustainability within the construction sector, with a focus on the adoption of:
- renewable energy sources,
- energy-efficient building designs
- recycled materials.
This is a sign of future policy to come for the broader infrastructure sector. The emphasis on sustainable practices highlights the need for environmentally friendly construction processes, including waste reduction, water conservation, and sustainable landscaping in project briefs. Moreover, the integration of life cycle analysis into building project designs will prompt the infrastructure sector to thoroughly assess the environmental footprint of their projects.
This approach will inform decision-making regarding materials selection, construction methods (such as Modern Methods of Construction), and operational practices, fostering a more environmentally conscious industry. This feeds into the new Infrastructure Guidelines requirement as part of the Preliminary Business Case which now includes the Climate and Environmental Performance assessment. The Green Procurement Policy will influence how this assessment is carried out.
Metrics
As the Infrastructure Guidelines are applied, comparable and consistent measures will be key to understanding the impact of GPP over time.
Traditionally, procurement in the construction and civil works domain has been multifaceted, involving various stages from project conception to execution. In Section 1.4 of the GPP Action Plan ‘Ireland’s commitment on Green Public Procurement’, the key objectives outlined (relevant to infrastructure) are to:
- Ensure GPP is a core and integral component of the public procurement process and associated governance structures in Ireland.
- Set out measures to ensure that all procurement using public funds include green criteria, where possible.
The headline categories for the measures are likely to be carbon accounting, social value and value for money. As the Infrastructure Guidelines are applied, comparable and consistent measures will be key to understanding the impact of GPP over time.
The execution will rely on infrastructure owners' capability to develop strategies in line with the pressure to quantify carbon emissions and report on a wide range of Environmental, Social, and Governance ("ESG) metrics to address the objectives of the GPP.
Ensuring the supply chain meets the GPP requirements will be critical and resourcing this will be a challenge. Inability to do so will result in a low/non-existent supply of services that will reduce the impact of Ireland’s sustainability agenda and potentially result in a failure to provide the necessary infrastructure to meet current and future societal needs.
To add to this challenge, the procurement and tender process needs to be mindful of the capability of the supply chain and not introduce tender award criteria too soon or without advance notice to allow the supply chain to upskill, prepare and transition more sustainable ways of working and delivering infrastructure projects.
Accelerating Green Public Procurement implementation
Compliance with GPP principles is emphasised, with a “comply or explain” approach for public bodies. To mitigate implementation risks, infrastructure developers will need to assess the new considerations added to the updated project lifestyle requirements and prioritise sectoral targets. The new considerations at each stage of the project lifecycle are captured below.
Sample metrics for building design and construction in GGP guidance
- Energy performance
- Use of renewable energy sources
- Recycling rates for construction waste
Where national GPP criteria is not available, criteria derived from other sources (e.g., EU GPP criteria) can be used or where such criteria can augment national GPP criteria that is already being used. The use of “Minimal Environmental Criteria” is recommended where no suitable national EU, or other specific GPP guidance is available.
Implementation timeline outlined in GPP strategy and action plan
- From April 2024: The GPP Mandate from the publication date of the GPP Strategy and Action Plan is applicable to 1) public sector bodies where the individual procurement spend using public funds is above EU procurement thresholds, and 2) government departments where the individual procurement spend is above applicable national procurement thresholds.
- From 2025: The GPP Mandate is applicable to public sector bodies where the individual procurement spend using public funds is above applicable national procurement thresholds.
Accelerating the implementation of GPP in sectors, will require the prioritisation of those specific sectors within the economy that have a greater economic impact and where GPP can play a critical role in assisting public bodies meet sustainability objectives and reduce emissions. Initial target sectors within infrastructure development include:
- The Built Environment, where from 2025 a minimum proportion of construction materials procured by public bodies under new contracts comprise recycled materials;
- Energy related products, heating equipment, indoor and outdoor lighting, where 100% of all tenders for the public procurement of heating systems to not install heating systems that use fossil fuels, in (1) new buildings, and (2) “major renovation” retrofit projects (as defined in the Energy Performance of Buildings Directive (EPBD)) subject to exceptions as specified in the Public Sector Climate Action Plan Mandate 2023
- Road transport vehicles and services, where 100% of all tenders for the public procurement of vehicles to procure zero emissions vehicles only, subject to exceptions as specified in the Public Sector Climate Action Plan Mandate 2023.
- Social enterprise and community-based organisations, whereby end of 2027, where possible and available, a minimum proportion of annual procurement by public sector bodies shall include used or repaired goods or materials.
GPP criteria provide public sector entities with a structured framework to align infrastructure projects with environmentally responsible practices. By embracing GPP criteria, public procurement projects can have a transformative impact on the market and shifting infrastructure demand towards greener alternatives and promoting the responsible use of resources.
In summary, the GPP Action Plan is welcome as it will have a significant impact on adopting and developing green and circular procurement practices. We now have the blueprint to move towards developing definitive criteria for public procurement in terms of infrastructure. The challenge going forward is defining consistent criteria and metrics as part of procurement strategies to understand the carbon impact (embodied and operational), the social value of infrastructure and ensuring value for money at every stage of the project lifecycle including when in use and operational.
Get in touch
Our Infrastructure team works with a wide range of clients in both the public and private sectors on various projects of differing size, scope and complexity.
By combining valuable insight with hands-on local experience, we can help address the challenges you face at any stage of the project life-cycle; from strategy and planning, to construction, operations and hand-back.
Contact our team below today for assistance on any aspect of your infrastructure project; we'd be delighted to hear from you.
