Last Wednesday, the 15th of July, EURADA organised a workshop on the role of Green Public Procurement (GPP) in the energy sector in Europe. The webinar “Green companies for green regions and green cities. The role of green public procurement to foster innovations in renewables” virtually gathered more than 20 Belgian regional/local authorities and innovative green companies to discuss European and Belgian procurement rules, barriers to SME involvement in GPP, and ways to overcome those barriers.
Europe’s public authorities are major consumers. It is estimated that 15% of Belgian GDP comes from public procurement. By using their purchasing power to choose eco-friendly goods and services, public authorities play a key role in fostering sustainable consumption and production. This “green purchasing” is what we call Green Public Procurement (GPP). GPP is also a strong stimulus for eco-innovation. In fact, it stimulates a critical mass of demand for more sustainable goods and services which otherwise would struggle to reach the market. There are, however, also barriers that must be removed. For example, it may be difficult for a public authority to find an SME offering the “green” innovative services needed. Conversely, it may be a barrier to SMEs that procurement procedures at regional and municipal level are overly complicated for them.
According to a study from the European Commission, SMEs success rates in public procurement are significantly lower than their contribution to GDP. Although the study was conducted before the coronavirus crisis, it offers recommendations that can be especially useful in helping SMEs recover and build resilience in the aftermath of the crisis. SME participation in above-threshold EU procurement seems to be slowly increasing over time. The share of contracts won by SMEs and their contract value have increased between 2011 and 2017. Factors such as the type of contracting authority or its location, the tender procedure used, the involvement of central purchasing bodies, and the use of specific procurement practices have little impact on win rates. Increasing participation and win rates could indicate that past policy has been effective in stimulating the participation of SMEs in public procurement.
The participants at the webinar “Green companies for green regions and green cities. The role of green public procurement to foster innovations in renewables”, organised in the framework of the Horizon 2020 project XPRESS, agreed on the fact that the main obstacle to SME collaboration with public authorities is establishing a relationship with the procurement department. Usually SMEs and public authorities work on different timescales, moreover there is a different mindset because it is necessary to find a balance between public procurement officers and SMEs (which have more of a “try and see” approach). Entrepreneurs have less administrative internal political barriers and go forward for tests, but then they have to wait for months because of the procedures, legal advice, etc. This approach takes up so much time and wastes so many resources. Fortunately, during the webinar two solutions were identified which could help a lot: 1) taking the time to comply with any request for the clients, and 2) collaborating with third parties, such as departments and university labs.
To give more details, the workshop featured three illustrated speakers: Jovana Gojkovic from Aqua Publica Europea, Alexandre Mahfoudh from Fuel Matrix, and Lies Debbaut, the project coordinator of the Interreg 2 Seas project SHIFFT.
Jovana Gojkovic, senior officer of Aqua Publica Europea, the European Association of Public Water Operators, illustrated the achievements made through the SMART:Met project. This project aims to drive the development of Smart Water Metering system that is new, cost-effective, efficient, interoperable, and based on open standards. The project is based on Pre-commercial Procurement (PCP). It is the stage to have procurements of research and the development of new innovative solutions, before they are launched on the market. According to Gojkovic, PCP involves multiple suppliers competing with each other through different phases of the process:
PCP is a particular procurement procedure for the acquisition of research and development services for new innovative solutions, before they become available on the market. Moreover, the PCP introduces a change on the market, allowing the public sector to purchase R&D services to guide the development of solutions suited to their needs. Therefore, the PCP allows the public sector to purchase the R&D results of different suppliers in parallel, comparing approaches between alternative solutions, competitively evaluating the progress following the crucial phases (design, prototyping, testing phase).
Mr Alexandre Mahfoudh works for Fuel Matrix, a company that designs solutions for the transition of vehicles into a greener future economy. The company has developed a technology that alters the intermolecular forces of hydrocarbon fuels to make them burn more efficiently in combustion engines. By developing this new kind of fuel, Fuel Matrix has been able to: cut emission (up to -80% and improving the air quality for everyone), make fuel savings (15-20% increase in fuel efficiency), and self-financed depollution. Fuel Matrix technology is protected by U.S. patents awarded in 2018 and numerous international filings. It has also been tested in official laboratories (University of California, Center for Environmental Research and Technology). Mr Mahfoudh illustrated to the audience a Belgian example. 47 public buses from TEC – a public bus company in Belgium – used fuel treated with Fuel Matrix for all their daily operations. After 6 months of testing, the results showed fuel savings of 15%.
The last speaker of the workshop was Lies Debbaut, SHIFFT (Sustainable Heating, Implementation of Fossil-Free Technologies) project coordinator. The objective of the project is to increase the adoption of low carbon technologies and applications in sectors that have the potential for high reduction in greenhouse gas emissions. The project consortium has created comprehensive guidelines for local authorities (Bruges and other cities) and community groups to facilitate and accelerate the transition to sustainable heat for houses and community buildings. These guidelines present policy options, solutions and practical tools to tackle the barriers for this transition. SHIFFT is also willing to create the sustainable heating transition with local community, assuring the strategy takes place. The project has had some important outputs such CO2 reductions of 276 tonnes per year, through 106 houses installing sustainable heating.
For those interested in the workshop, by clicking here you can watch it.