EU legal framework on public procurement: a barrier to local energy ownership

European Union regulation should allow municipalities to untap local potential to enable Europe’s energy transition. The ongoing review of the Public Procurement Directives should be utilised as an opportunity to simplify the existing rules and allow fairer access to local businesses and communities.

Local public-public/citizen partnerships are a good way to pool resources. If the goal of the Clean Industrial deal is to support sustainable and resilient industrial ecosystems, jobs and value creation, allowing local authorities to use social conditionalities is a good strategy to effectively deliver.  As highlighted in the Competitiveness Compass Communication, “to shift the economy towards clean production and circularity, the EU must foster lead markets and incentivize early movers.” Harnessing the power of the EU’s domestic market is essential, and measures such as preferential treatment in public procurement or financial incentives can encourage demand for local, sustainable solutions.

Requirements favouring short(er) supply chains and local requirements with social and environmental benefits for local ecosystems should be expressly allowed under the EU Public Procurement Framework. This change is necessary in order to promote and respect the EU’s legal principle of equal treatment towards smaller social economy actors, respect for the subsidiarity principle. It is also necessary to ensure local authorities and Member States are able to deliver under their legal obligations according to EU Energy legislation, including the delivery climate and energy targets.

Despite the number of positive examples of local authorities promoting a just and fair energy transition through the use of public procurement and concessions procedures, the EU legal framework acts as a barrier rather than an enabler to local ownership and collaboration. In addition, EU public procurement rules are ineffective in promoting public partnerships with local actors and the EU’s legal framework is not coherent within itself, or with EU climate and energy objectives and legislation.

Together with Rescoop.eu we came up with 7 recommendations to align EU’s public procurement framework with climate and energy objectives:

1. Reference/anchoring to policy objectives that public procurement should help promote, including environmental, social and economic development objectives
2. Exempt social economy actors, such as energy communities, from needing to participate in procurement procedures, as long as they are anchored to achievement of specific policy objectives
3. Allow local authorities to develop procedures dedicated to energy communities
4. Elevation of the legal status of Green and Social Procurement Criteria into the public procurement framework
5. Reform of Most Economically Advantageous Tender to reflect new needs of EU economy, including local economic, energy, and financial security
6. Acknowledgment of local added value in procurement decision making and guidance on how it can be integrated into life cycle costing methodologies
7. Set up regional support structures to help smaller municipalities on procurement matters

Read the full document to find out more and discover practical examples of frontrunning municipalities using procurement as a tool to achieve their climate and energy objectives!