Decarbonisation in Public Procurement 2026

Definition: In the context of public procurement, decarbonisation means the systematic reduction of greenhouse gas emissions across the entire life cycle of procured products, works and services, pursued as a strategic objective of climate policy.

Last updated: January 2026 · Legal basis: Directive 2014/24/EU Articles 67–68, German Climate Protection Act (KSG 2021), Austrian Climate Protection Act

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Decarbonisation as a strategic procurement task

Public procurement is a key lever for meeting national and European climate targets: with annual procurement volumes running into trillions of euros, the public sector can transform markets through climate-conscious purchasing decisions and accelerate innovation towards climate neutrality. The European Green Deal sets the EU on a path to climate neutrality by 2050; public procurement is expected to lead by example and drive the market.

Decarbonisation objectives in procurement include:

• Reducing the contracting authority's Scope 1, 2 and 3 emissions
• Procuring climate-neutral or low-emission products
• Promoting suppliers with credible decarbonisation pathways
• Using life-cycle costing to internalise the cost of CO₂

Procurement-law instruments for decarbonisation

Procurement law offers extensive options for embedding decarbonisation requirements in a legally sound way.

Life-cycle costing (Article 68 of Directive 2014/24/EU)

When awarding contracts, contracting authorities may take life-cycle costs into account, including the cost of external environmental impacts (CO₂ emissions, air pollution). Monetising CO₂ emissions through shadow prices makes climate-damaging bids more expensive in the evaluation and favours climate-friendly bids.

Award criteria

Climate-related quality criteria can be used as award criteria:

• Greenhouse gas emissions per unit of service
• Share of renewable energy at the supplier
• Decarbonisation plan of the bidder (for long-term contracts)
• Certifications such as ISO 50001 or ISO 14064

Technical specifications

Emission limits, energy-efficiency classes and material requirements can be set as minimum technical requirements.

Contract performance clauses

Climate protection measures can be agreed as contractual obligations for the duration of the contract, for example annual CO₂ reports, stepwise emissions reductions or offsetting mechanisms.

Climate protection as a mandatory procurement task

In Germany, the Climate Protection Act (KSG 2021) obliges all federal authorities to contribute to meeting the national climate targets. The National Action Plan on Sustainable Procurement (NAP-NB) sets out concrete measures for federal procurement. In Austria, comparable obligations are anchored in the Climate Protection Act and the National Energy and Climate Plan (NEKP).

Practical challenges

Integrating decarbonisation requirements into award procedures comes with methodological and legal challenges:

• Data availability: Reliable emissions data for products and supply chains are often hard to obtain.
• Comparability: Different calculation methods (GHG Protocol, ISO 14064, LCA) make bid comparison more difficult.
• Proportionality: Decarbonisation requirements must be proportionate and must not unduly restrict competition.
• SME readiness: Smaller companies often lack the resources to provide extensive climate-related evidence.

FAQ

May a contracting authority mandate climate-neutral products as a binding requirement? Yes, provided this is proportionate and linked to the subject matter of the contract and that a sufficient number of suppliers can meet the requirement. Excessively demanding requirements risk a de facto restriction of competition.

Can emission offsetting be recognised as equivalent to actual emissions reductions? This is at the contracting authority's discretion. It is good practice to weight genuine reductions higher than offsets and to accept only recognised offset standards (e.g. Gold Standard, VCS).

Are there standardised methods for life-cycle costing with CO₂ pricing? Yes. The European Commission has published guides and tools, including the "Life Cycle Costing" (LCC) tool for vehicle procurement, as well as methods under the GPP (Green Public Procurement) criteria.

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Last updated: January 2026 All information provided without warranty. For legally binding advice please contact a law firm specialising in procurement law.