2017 EU-Taiwan Green Public Procurement Seminar
2017 臺歐綠色政府採購研討會
Taipei, 27 April

Note: This is an abridged version. To read the full report, please click HERE.

The European Economic and Trade Office (EETO), under the framework of the European Business and Regulatory Cooperation (EBRC) programme, co-hosted the “2017 EU-Taiwan Green Public Procurement Seminar” together with the Public Construction Commission (PCC), the Ministry of Transportation and Communications (MOTC), the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs (MOEA), and the Taiwan External Trade Development Council (TAITRA). The full-day event gathered 150 participants from Europe and Taiwan, which included regulators, representatives of central and local governments and business to discuss the concept and implementation of “Green Public Procurement” (GPP). Experts from the European Commission, EU Member States (France, the Netherlands and the UK) and Taiwan shared policies and strategies on GPP and the best practices for green, sustainable and circular procurement projects. The event began with opening remarks by the guests of honour. The morning session focused on the best practices of GPP projects in Europe while the afternoon session focused on green procurement policies and implementation.


Guests of honour
Dr Chang San-Cheng (張善政), Vice Premier, Executive Yuan (EY)
Ms Madeleine Majorenko, Head, European Economic and Trade Office
Ms Tsai Yu-ling (蔡玉玲), Minister without portfolio, EY

Moderators

Mr Kao Fu-Yao (高福堯), Deputy Minister, Public Construction Commission, Executive Yuan
Ms Viktoria Lövenberg, Deputy Head, European Economic and Trade office (EETO)
Mr Fan Chih-Ku (范植谷), Deputy Minister, Ministry of Transportation and Communications (MOTC)
Mr David Hsu (徐大衛), Deputy Director-General. Bureau of Foreign Trade, Ministry of Economic Affairs 

Speakers

Ms Maud de Vautibault, Head of Legal Affairs, Directorate General of the Treasury, Ministry of Economy and Finance, France
Mr Mark Hidson, Deputy Regional Director, ICLEI-Local Governments for Sustainability
Dr Mervyn Jones, Director of Sustainable Global Resources, UK
Mr Guy Wittich, Representative and Head of Mission, Netherlands Trade and Investment Office (NTIO) 
Mr Robert Kaukewitsch, Green Public Procurement Officer, Directorate General for Environment, European Commission
Mr Hung Shu-Hsing (洪淑幸), Director-General, Department of Supervision Evaluation and Dispute Resolution, Environmental Protection Administration (EPA)
Mr Wen Tai-Hsin (溫代欣), Chief Secretary, Railway Reconstruction Bureau, Ministry of Transportation and Communications (MOTC)  

Opening remarks

In her opening her remarks Ms Viktoria Lövenberg pointed out that government procurement is an important topic on the EU-Taiwan dialogue agenda, as both Taiwan and the EU are parties to the WTO’s Government Procurement Agreement (GPA). She added that Taiwan and the EU are also strong partners when it comes to combating climate change and are joining efforts in the commitment to a low carbon and more sustainable future. She emphasized the fact that in Europe public authorities are major consumers, spending approximately €1.8 trillion annually, which this represents around 14% of the EU’s gross domestic product. She also made the point that by promoting and using Green Public Procurement (GPP) or green purchasing, public authorities can provide industry with real incentives for developing green technologies and products. The EU's Circular Economy Action Plan, adopted in December 2015, highlights GPP as one of the measures necessary to ensure more effective and efficient use of resources. The benefits associated with GPP are not limited to the impact on the environmental, but can include everything from social and health to economic and political benefits. She noted that the EU is keen to engage in international cooperation with partners like Taiwan in order to increase resource efficiency in global value chains. Taiwan is developing its green public procurement policy for major infrastructure projects. For the many large scale infrastructure projects that would help to translate this plan into reality, GPP is seen as an approach that could improve the investment environment, stimulate investment by state-run enterprises, and boost innovation while respecting the government’s commitment to “greening up” Taiwan’s industry. 

Mr Kao, Fu-Yao (高福堯) stated that the PCC has made it a priority to promote energy conservation and carbon reduction in government procurement cases. He pointed out that Taiwan joined the WTO’s GPA in 2009 and that Taiwan’s government procurement regulations are now in line with the provisions of the GPA and attach great importance to green procurement, which has been specified in the relevant regulations. He pointed out that authorities have added new requirements governing the use of natural resources and give preference to green vendors. In addition, government agencies are required to procure green mark products while public schools and agencies are also encouraged to procure green products. Mr Kao stressed that Taiwan and the EU have already co-organised seven seminars on government procurement. Prior to this year’s seminar focusing on GPP, previous topics covered included the general introduction of procurement systems and more specific issues, such as the most economically advantageous tenders. He said that these events foster mutual understanding between Taiwan and the EU, and strengthen bilateral cooperation in government procurement. He concluded that purchasing power has great potential to limit the impact on the environment.

Mr Fan Chih-Ku (范植谷) noted that the integration of high-speed rail, railways and local MRT green rail transport systems is one of President Tsai’s policy directions for the year 2017. In this regard the development of railways is one of the largest items in the budget of the government’s forward looking infrastructure development programme and the MOTC will actively promote rail transport, increase the usage of public transport and improve seamless access to transport services for both commuters and tourists, which will pave the way to improve the quality of the traffic environment and promote sustainable development. He noted that there is only one section of Taiwan’s railway network, the south link line, that has yet to be electrified. Once this is completed Taiwan will have totally electric island-wide railway network. He made the point that Taiwan has examined and used best practices from Europe in developing its railway network and he welcomed the opportunity to explore further opportunities for cooperation to make a green circular economy a reality.

Mr David Hsu (徐大衛) stated that joining the GPA has not only benefitted Taiwanese enterprises that seek opportunities in global government procurement markets, but that it has also helped to integrate Taiwan’s industries in global supply chains. The BOFT expects Taiwan and the EU to create more opportunities for industrial cooperation and trade.

 

Morning session : Best Practices of GPP Projects

Topic 1: Green Public Procurement – Best practices in France

Speaker: Ms Maud de Vautibault, Head of Legal Affairs, Directorate General of the Treasury, Ministry of Economy and Finance, France

The speaker gave an overview of the legal framework in France, which draws on two main EU directives.

Under Directive 2010/31, which covers the energy performance of buildings, after 31 December 2018, new buildings occupied and owned by public authorities are required to be “nearly zero-energy buildings”. By 31 December 2020, all new buildings are to be “nearly zero-energy buildings”. Minimum energy performance requirements are to be set by Member States.

Under Directive 2012/27, which covers energy efficiency, 3% of the total floor area of buildings owned and occupied by central governments have to be renovated each year. In addition, energy companies (retailers/distributors) are to achieve 1.5% savings in energy usage each year, which is based on the EU’s legal framework Directive on energy performance. All new buildings by 2020 should be nearly zero energy buildings.

French legislation has several laws known as “Grenelle” laws, governing environmental issues. For example, Article 5 of Grenelle 1 law sets a 40% energy consumption reduction target for public buildings by 2020. This is a compulsory target for the state and a recommended target for local authorities.

France also enacted an Energy Transition law on 17 August 2015 and related decrees. In terms of public procurement France has a Public Procurement Ordinance and a Concession Ordinance.

The main objectives of the Energy Transition Law are: Reducing greenhouse gases by 40% by 2030, reducing final energy consumption by 50% by 2050, increasing renewable energy to 32% of total consumption by 2030 and reducing nuclear energy to 50% of total consumption by 2025.

The main fields covered by the Energy Transition Law are: Renovation of existing buildings, improvement of the energy performance of new buildings, developing clean and sustainable transportation and developing renewable energy, especially hydroelectric. According to Ms de Vautibault, France currently has 42 Gigawatts (GW) of renewable energy capacity and 19% of electricity generated comes from renewables.

France’s public procurement tender requirements are inspired by the EU directive. Technical specifications may be formulated by reference to European, international or national standards in terms of performance or functionality. Technical specifications can be formulated in terms of environmental and climate performance levels of a product, service or work. For example, in accordance with Article 31 of the Public Procurement Ordinance, public authorities shall take into account the energy efficiency impact in their vehicle procurement contracts as well as specifying materials and production methods.

Environmental aspects are also included in selection criteria to assess the suitability of an economic operator to carry out a contract. The most relevant criteria for GPP in France are: Environmental technical capacity, environmental management systems and supply chain management measures.

It is possible to apply environmental award criteria provided those criteria are linked to the subject matter of the contract, do not confer an unrestricted freedom of choice on the contracting authority, ensure the possibility of effective competition, are expressly mentioned in the contract notice and tender documents and comply with the treaty principles.

Contract performance conditions may impose specific obligations related to environmental considerations, such as clauses related to the installation and commissioning of energy systems, waste and materials management, clauses related to efficient use of resources such as electricity and water on construction sites and clauses of default in the event of not reaching the energy consumption requirements of the building.

France also allows the use of labels whereby the contracting public authority could impose a specific label as a technical specification, a selection criteria or a performance condition of the contract. As a technical specification, a label can be used in two different ways: To help to draw technical specifications or to check compliance with these requirements (proof of compliance).

Life-cycle costing is also used which implies considering all the costs that will be incurred during the lifetime of the product, work or service (purchase price, operating costs including energy, fuel and water, end of life costs and external costs such as greenhouse gas emissions.

Energy performance contracts cover two main categories of contracts under the Public Procurement Ordinance: Global performance contracts and PPP contracts. Specific obligations may be imposed in these contracts in terms of energy performance.

Environmental performance in public procurement contracts are linked to the scope of work given to the contractors. There is a specific focus on the building sector. For example the PPP of the ministry of defence has specific environmental clauses in the contract, such as installing photovoltaic panels, while there is an energy efficiency requirement in the procurement contract for building renovations to primary schools in Paris. Contracts are applicable to both brownfield and greenfield projects.

In terms of the key commitments in energy performance contracts in the energy renovation of buildings, the main obligation of the contractor is to guarantee a performance improvement target over the duration of the contract (compared to a baseline), allowing the parties to measure performance and apply penalties if contractors fail to meet targets.

Possible uses include improvement of thermal performance (insulation), improvement of equipment efficiency (steam generators), air circulation, operation or remote-controlled operation, changes in the conditions of use of the buildings and user behaviour.

The French government is financing energy transition by energy efficiency certificates (known as white certificates). Energy companies are to meet their 1.5% savings target by obtaining or buying white certificates delivered when energy efficiency operations have been performed by eligible bodies (notably public bodies and the social housing sector). In practice, this means that energy operators will either have to perform energy efficiency works themselves or to finance energy efficiency works of the public sector. Specialised private sector operators propose works to public bodies, obtain the certificates and sell them to energy companies to pay for all or part of the costs of the work.

Other mechanisms to encourage energy efficiency include tax credits, which are available to households paying the income tax for energy efficiency works or equipment (insulation, renewable heating, or renewable electricity). The scheme can finance up to 30% of the work (although there is a cap of €16,000 for a couple).

Zero interest “eco-loans” are available for energy efficiency works on buildings used for dwelling purposes built before 1990, up to €30,000, for works to be performed by contractors with a specific environmental label, loans distributed by commercial banks having signed a specific contract with the French state. All major French banks have signed and banks are compensated by a corporate income tax credit.

France also offers reduced VAT rates for energy efficiency works on buildings used for dwelling purposes (ranging from 2.1 to 10%, compared to the standard 20% VAT rate). There is no cap.

In addition, multiple financing mechanisms are available for the social housing sector such as specific eco-loans, long-term loans with zero interest rates for 20 years, a 5.5% VAT rate and reduced land tax.

 

Topic 2: Approaches to sustainable procurement: Objectives, illustrative practices and emerging trends – a European perspective

Speaker: Mr Mark Hidson, Deputy Regional Director, ICLEI-Local Governments for Sustainability

The speaker introduced ICLEI and how the organization is helping to support GPP and shared some approaches to sustainable procurement from a European perspective.

Green Public Procurement (GPP) is defined as a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life-cycle when compared to goods, services and works with the same primary function that would otherwise be procured.

Social Public Procurement (SPP) goes further than GPP by taking into account social aspects. It is a process whereby public organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life-cycle basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst significantly reducing negative impacts on the environment”. What both GPP and SPP have in common is that they both address life cycle costing.

The drive towards GPP comes from society, business and the public sector. Society has a sense of concern over use of natural resources, the impact on the environment and society. Business are concerned about the costs of raw materials, the need for securing resources, their image and the need for new business models and market opportunities. For example, previous business models relied on selling photocopiers and fax machines while the preferred business model now is for companies to lease photocopiers, using service contracts which include maintenance services. Businesses recognize they need to change to survive. The public sector often accounts for a large portion of GDP. Public authorities are not just thinking about looking good but also want to address key challenges such as policy and environmental goals and find innovative solutions to meet challenges and improve cost efficiency.

Public procurement directives have set a good framework. Environmental, social and innovation can be taken into account. They allow for specifying production processes such as for organic food, electricity from renewables, chlorine free bleaching. Rules on the use of life cycle costs (LCC) were set in in 2014. Environmental and social labels can be used. Social requirements such as the integration of disadvantaged persons may be included while fair trade principles and labour conditions can be taken into account in the award criteria.

There is now recognition of the importance of including usage and disposal costs and the coordination among various departments within an organization. For example, the department that purchases equipment should coordinate with those that use the equipment and those that are responsible for paying for the power and service. ICLEI has created various tools to calculate LCCs. “The Procura+ Manual” is a guide to implementing sustainable procurement on a large number of products and services ranging from cleaning products to IT equipment to transport. He noted that the EU’s clean vehicle directive monetizes CO2 and takes into account the operational impact on vehicles. Under the EU’s energy star directive, national governments have to purchase IT equipment that meet energy star requirements. The Netherlands, for example, has introduced mandatory targets while other Member States have opted for training, guidance or other means.

Mr Hidson made the point that the tender stage is already too late to be considering GPP. It has to be done in the planning stages. GPP is considered expensive but this is not the case if you take into account LCC. Over the long term GPP can result in cost savings.

Besides having good legislation, there is also the need for a soft approach. Procura+ is a network designed to help support public authorities in implementing sustainable procurement and help promote their achievements. It has been running for 12 years and now has 43 participants in leading cities in 18 countries.

The Procura+ manual, which is available online, specifies the six key areas that have the greatest impact on environment. It therefore makes sense for authorities to focus their efforts on these areas. ICLEI also runs training programmes and a procurement forum where people share resources.

Answering the question as to whether it works, Mr Hidson replied yes, but that it takes some effort, especially at the beginning.

He went on to cite some successful case studies. The city of Luxembourg requires environmental management systems to comply with ISO14001 or equivalent standards for cleaning services, lists banned substances and a second list which discourages the use of certain substances such as dyes, colourants, fragrances, bleach and acid. As part of their contract performance clauses, contractors are required to supply samples of new products introduced. Random testing is done and the contactor is obliged to provide alternative products if the requirements are not satisfied. Fines are issued if a banned substance is found and, in extreme cases, contracts may be cancelled.

A contract for furnishing for the city hall of Venlo required a minimum technical life of 10 years, after which all parts had to be available in the market for refurbishment. Textiles could not contain chlorinated artificial fibers, halogenated flame retardants or benzedrine based dyes.

The city of Barcelona in 2010 spent €43 million on green products and €92 million on “greened” services (such as lighting and fountain maintenance). In 2013 the city adopted mandatory green criteria for vehicles, electricity, food and catering services.

In the city of Rome 69% of the 144,000 meals served by the city each day contain organic food.

In the town of Venelles, France, the majority of cleaning products purchased are eco-labelled and fully biodegradable.

The trend in Europe is to move away from a linear approach (buy, use and dispose) to a circular approach, which takes all stages of a products life into account including what it is made of, how it is made, transported, used and disposed of. Instead of seeing their services simply as an administrative function, public authorities should see their services but as a strategic way to influence change.

To be successful, there is a need to professionalise procurement. This requires teaching the requisite skills, better market intelligence, better use of pre procurement, market dialogue skills, involving end users and better contract management. If done in an optimal way, it can create markets, economic growth and jobs.

Mr Hidson concluded that GPP should be mandatory, embedded in policy and legislation with clear and unambiguous rules. In addition, soft support measures are key to driving change.


Topic 3: Towards a circular economy – A model for procurement

Speaker: Dr Mervyn Jones, Director of Sustainable Global Resources, UK

Good public procurement is about collaboration not only between companies but also between public and private sector players. The demand for resources is only going to go up given population growth. The traditional linear economy has hidden costs (such as disposal and social costs) while the transition to a circular economy has multiple potential benefits in terms of reducing costs and impact (both on the environment and society) from production and consumption.

National policy benefits go hand in hand with organisational benefits including reducing commodity price pressures and price volatility, reducing country/availability risks and developing domestic, circular industries that reduce dependency on imports. Since 2003 the resource limits and rapid growth in global demand erased the decline in commodity prices achieved over the previous century. Commodity price volatility is now a key economic concern. This does not imply that future commodity price increases are inevitable but they are more likely to occur for both producers and consumers unless we adopt different strategies for growth. We have to decouple consumption from growth.

The circular economy is about bringing products, suppliers and procurement together to produce better outcomes. A circular economy is an alternative to the traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life. It also provides resilience through sustainable consumption and production, decoupling resources from growth, creating wealth, jobs and growth and delivering accountability at all levels. Using fewer resources, making products that last longer and recycling and reusing materials will become increasingly important, especially for island economies like Taiwan that do not have enough resources domestically. The circular economy is not just about saving the environment. It actually saves money. Studies cited by the speaker estimate that the circular economy could generate between €300-350 billion in material savings alone in Europe, boost GDP by €324 billion and lead to the creation of over 2 million new jobs.

The circular economy influences supply and necessitates a new way of looking at business models and financing, how contracts are managed, and what happens to products at the end of their useful lives.

Dr Jones expressed the view that the circular economy will eventually happen as a result of market forces but authorities can speed up the process by going even further than European directives.

Circular procurement depends on the ambition of the organisation, translated into policy through the proactive effort of the clients and budget holders. In other words, circular procurement needs circular clients.

Critical to the circular economy is the ability to avoid the disposal of resources and to remanufacture and re-use goods, and recycle and recover materials. Adopting a circular approach will help deliver strategic goals through waste prevention (such as food), influencing production (such as design), influencing consumption (& procurement), influencing disposal (such as collection) and market development (such as re-use and recycling).

Analysis conducted in the UK reveals key areas where the biggest difference can be made. This is important for politicians who need to demonstrate positive outcomes over short time periods [election cycles]. There is a lot of waste in the food and catering and construction, water and energy use. We need to think about waste prevention.

Dr Jones went on to cite some best cases. In work wear for public sector workers, The Netherlands encourages innovation in design, reduction in carbon impact, reduced toxicity, increased durability and increased reuse and recycling at the end of life. In an example from the construction industry, a town hall in Brummen in The Netherlands has been designed to last for 20 years and so that all materials can

be disassembled and reused afterwards. The buildings used no welding and nuts and bolts can be reused. This reduced costs considerably.

How transport is used could also use a rethink. Germany and The Netherlands are experimenting with various car sharing schemes. For example, government agencies share vehicles rather than having their own. One scheme in Germany even allows private citizens to rent publically-owned vehicles for short periods when they are not needed by the authorities.

In Taiwan there is great potential to redesign IT products for repair and recycling. There are also good examples in the Netherlands of circular furniture models.

A product itself is not circular unless you make it circular. Getting it right will require good engagement and some trial and error. That is why Dr Jones recommended conducting pilots to gather experience, to analyse projects, disseminate knowledge, build capacity and implement circular procurement.

But there are real benefits from adopting circular economy models, as borne out from real figures, which show rapid and significant improvements on resource use in the UK as well as prevention of waste, resource efficiency and product sustainability. 


Topic 4: Circular procurement

Speaker: Guy Wittich, Representative, Netherlands Trade & Investment Office (NTIO)

The speaker gave a presentation that had been prepared by Joan Prummel, Circular Procurement Facilitator, Rijkswaterstaat, The Netherlands.

The world is facing not just an accumulation of waste but a rapid depletion of resources. This is especially apparent in countries like Taiwan and the Netherlands, which have few of their own resources. This is why international cooperation is needed and why we need to change our behaviour.

Output is the result of input and waste is the result of procurement. While we are still in the early stages of moving towards a circular economy, it is already clear that there are huge benefits in terms of cost savings and economic generation (he suggested a figure of €600 billion). When speaking to business, it is important to focus on the economic benefits in addition to the environmental benefits. The circular economy could also help with the problem of youth unemployment by giving young people employment.

The Dutch government has set a target to achieve a circular economy by 2050 and an interim target of a 50% reduction in the use of raw materials by 2030. The national government has an ambition to not produce any waste anymore. Chain agreements are to be made in all the purchasing categories regarding reuse and recycling. If possible, these agreements will lead to financial profit for the government. Waste should no longer cost money but be useful materials that generate a source of income. In line with its ambition the government has prioritized focus on the areas of biomass and food, plastics, the manufacturing industry, the construction and consumer goods sectors which it will do through a combination of fostering legislation and regulations, intelligent market incentives, financing, knowledge and innovation and international cooperation.

While there is general recognition that supply chains are now international, there is much that government agencies can do to speed up change. For example, construction companies will have to sign agreements regarding cement usage. In the future, it will be a requirement for all building materials be able to be dismantled and reused.

On 25 January this year the Dutch government signed the National Raw Materials Agreement with companies, trade organisations and NGOs. Under the agreement signatories agreed on steps to reduce the use of raw materials.

The first step is to agree to transition agendas, after which entities will be set up to drive the agenda towards the objectives. The initiative is mobilizing everyone and being implemented across all ministries in the Netherlands, based on their respective areas of authority.

The three main procurement models are product service systems, buy-sell back and buy-resell. A good example is the decision by the Schiphol airport authorities to outsource lighting to Philips. Under the contract, rather than buying lights and fittings, the airport company just pays a set fee for lighting. This new circular economy model has prompted Philipps to design better lighting solutions that last longer and minimize waste. The example shows how authorities can force change by demanding circular business models.

In northern Taiwan the popular Ubike bicycle sharing system is another good example of a circular economic model, which has prompted the bicycle suppliers to make their bicycles 100% refurbishable or recyclable. Authorities could lead by example by experimenting with circular pilots, making circular economic models mandatory or offering incentives to accelerate the circular economy.

Circular economic models also look at problems in a different way. For example, the Dutch government used to spend a lot of money on disposing of confidential documents. They have since found a way to actually earn money from the disposed paper. A prerequisite for making this work was cross-ministry cooperation.

Mr Wittich acknowledged that making the computer hardware industry circular is difficult because it is a global supply chain and there are a lot of small components, some of which contain toxic materials. Making the industry circular would therefore need a lot of coordination among numerous governments and companies. But the Dutch government is taking a step towards this with a pilot project together with semiconductor companies.

Rather than working in silos it would be better for cooperation so that everyone can learn from one another’s mistakes. It also makes sense to integrate circular economy concepts in all business decisions and as part of key performance indicators within government ministries. This will work faster and better because everyone will see circular targets as part of their own targets.

Mr Wittich concluded with the message that circular procurement is a lever for the circular economy and that collaboration is key.


Morning panel discussion

The morning session was concluded with a fruitful panel discussion in which all four experts from the morning session discussed GPP issues in depth and answered questions from the audience. 

During the discussion they emphasized the need for networking and information sharing so that the best ideas are adopted and mistakes are avoided.

In terms of actions already being taken, the city of Paris requires zero waste for construction work sites. Some authorities in France require 50% of construction materials to be made of recycled materials.

Panelists emphasized the concept of learning by doing and allowing some room for making mistakes. Doing pilot projects sets expectations lower and thereby allows room for error. It is also important to set targets for the circular economy in order to create a degree of urgency.

Inter-ministerial cooperation is necessary. For example, France’s ministry of environment sets policies in cooperation with the ministry of finance and economy, which is in charge of procurement, as well as the transport ministry.

It is important to get commitment both among the highest level officials and lower ranking officials. It is also preferable if initiatives are not just driven by one ministry. One way to foster inter-ministerial cooperation is to set up interdepartmental working groups. It is also important to broadcast success cases. Once something works, other departments tend to get interested. Some governments set up central purchasing departments which act on behalf of all ministries. However, it would be better to integrate circular economy concepts in all processes.


Afternoon session: Green procurement policy and implementation

Topic 1: Current status and outlook of promoting green procurement in Taiwan

Speaker: Ms Hung Shu-hsing (洪淑幸), Director-General, Department of Supervision Evaluation and Dispute Resolution, Environmental Protection Administration (EPA)

The speaker shared her views on the current status and outlook of promoting green procurement in Taiwan. She expressed the view that the best approach is top down, whereby agencies draft relevant action plans. The next step is to work with enterprises to encourage enterprises and civic groups to purchase premium green products. The final step is education of the public and outreach on the concepts of green living and promoting green purchasing habits.

The speaker went on to chart some of the government’s actions concerning green policies. Taiwan introduced its green mark guidelines in 1992. In 1998 the Government Procurement Act specified giving priority to green products. In 2002 the “green programme” was implemented. In 2006 the green purchasing policy for the presidential office and other yuans was implemented. In 2007 a new project promoting private sector green purchasing was launched. Today 90% of government procurement needs to be green.

Two studies completed in 2011 and 2012 show that the target for green procurement in Taiwan is narrower than internationally. Only products with green labels recognized by the authorities qualify for green public procurement while other countries accept third party certification or simply evidence that the products are green. 

What qualifies as a green product or services in Taiwan? The accepted definition is products that provide recyclability and low pollution and save resources during use. Taiwan promotes green products through its Green Mark label, green product certificates, energy saving label, water conservation label, green building material label, carbon footprint label and carbon footprint reduction label.

Green marks are issued to the top 20-30% of products in their respective categories in terms of environmental protection. There are 14 categories and 126 types of products that bear the green mark. Products that succeed in getting the mark, may keep it for three years, after which they have to apply for renewal.

As of 18 April 2017, the green mark has been awarded to a cumulative total of 13,684 products, of which 4,723 are still valid. The carbon footprint label has been issued to 508 products, of which 273 are still valid. In addition 10 products have achieved the carbon footprint reduction label. All of these help consumers to identify good products and aim to encourage them to change their purchasing habits.

The energy efficiency label indicates that the energy efficiency of the specified product is 10-50% higher than the national standard.

In 2001 the Executive Yuan promulgated the “Government Green Procurement Program” which required governmental entities to place priority on purchasing environmentally-friendly products. Besides regulations there are also rewards for agencies that have performed well.

Under Article 96 of the Government Procurement Act of 1998, an entity may provide in the tender documentation that shall give preference to a product which has obtained a label of environment protection approved by the government with the same or similar functions.

Regulations for Priority Procurement of Eco-Products were promulgated in 1999 while the Green Procurement Program for Agencies was introduced in 2001. The Resource Recycling Act of 2002 specifies that to promote the recycling and reuse of materials, all government agencies, public schools, public enterprises and organizations, and military authorities shall preferentially procure government-recognized environmentally preferable products, renewable resources produced within the national territory, or recycled products in which at least a certain proportion of renewable resources are used as raw materials.   

The government has set up a template contract for green procurement that is accessible to all government agencies. In 2017 there is a range of 168 kinds of products specified for government green purchasing and 46 designated products that government agencies are required to buy. They include cleaning and IT products. All agencies need to register green procurement data so that it can be tracked.

In terms of private sector outreach and awards to incentivize the private sector to engage in green procurement, the “Green Purchasing Project for Private Enterprises and Groups” was started in 2007 which implements a green purchasing system for private enterprises and groups through the assistance of local governmental environmental protection bureaus and educates employees on green purchasing. The government is also working with neighbourhoods and schools to promote green consumption.

Events are held on earth day to encourage citizens to use their purchasing power to promote environmentally-friendly products. 10,000 “green stores” in Taiwan have been identified. (A green store is defined as a store that helps to record the sales of green products to track changes in consumption behaviour.) Statistics are encouraging as they show a growing trend of consumers purchasing green products.

In terms of government green purchasing, green procurement has remained at around NT$7 billion for the past four years. However, this may be more attributable to budget cuts and a reduction in the use of paper and other office supplies (implying that the proportion of spending on green products is not decreasing). However, there is still room for improvement in government green procurement which is why the government will continue to promote green consumption in broader society through various schemes. 


Topic 2:  EU’s green public procurement policy

Speaker: Mr Robert Kaukewitsch, Green Public Procurement Officer, Directorate General for Environment, European Commission

The speaker gave a presentation on the EU’s GPP via video conference.

The EU has more than 100,000 procurement entities which means there is a huge diversity in GPP policies and stages of development. At present most policies are voluntary. Some entities have been incorporating some form of GPP as far back as the 1980s and some entities still not doing anything.

The GPP legal framework was only introduced in 2014. It gives a lot of leeway to public authorities. There are rules on how to purchase, not what to purchase. It is possible to set environmental requirements for products, services and works to be purchased and the possibility to require certain production processes. What is not possible is to set requirements on overall company policy.

While GPP is voluntary, there are some exceptions. In particular, the Energy Star Regulation of 2008 obliges entities to buy office equipment at least as efficient as the Energy Star standards. In addition the Clean Vehicles Directive of 2009 obliges authorities to buy environmentally-friendly vehicles, taking into account pollutants. The Energy Star requirement is working well and has been very effective. The Clean Vehicle Directive has been less effective and is therefore under revision. Finally, under the Energy Efficiency Directive (of October 2012) there is a “soft” obligation to purchase energy efficient buildings and equipment of the highest energy labelling class, but this only applies to the central government, purchases above the value thresholds and “insofar as this is consistent with cost-effectiveness, economic feasibility, wider sustainability, technical suitability, sufficient competition”.

Under Communication (2008) a political target has been set for 50% of tendering procedures to be green. The product groups are chosen by looking at public expenditure, environmental impact, improvement potential, whether standards are available and verification is feasible. It is not certain how much progress has been made since 2008. There are quite a lot of data gaps and it is not really known how much is being spent on GPP in the 28 EU Members States.

There are more than 20 EU GPP criteria at present covering cleaning products and services, copying and graphic paper, transport, electricity, food and catering services, gardening products and services, wall panels, water-based heaters among others. There are new criteria for computers and monitors and office buildings. Under development are criteria for road lighting, food and catering, cleaning services, furniture, textiles, transport, paints and varnishes, data centres, imaging equipment and road lighting.

The GPP (GPP/Ecolabel) development process by the Joint Research Centre and DG Environment is extensive and aims to involve all stakeholders, working with experts. There are two levels of criteria: Core criteria, which aim to address the key environmental impacts and require minimum additional verification effort or cost increases and comprehensive criteria which aim at purchasing the best environmental products available on the market, possibly requiring additional verification efforts or a slight increase in cost compared to other products with the same functionality. GPP criteria are largely based on standard Type I ecolabels.

There is close cooperation in DG Environment in developing both the EU GPP and the EU Ecolabel. Criteria for both tools are developed in parallel whenever relevant (eg IT equipment, furniture and textiles) and EU GPP criteria are usually a simplified version of Ecolabel criteria.

The Commission offers lot of support tools. Full sets of EU GPP criteria and background
reports in 20+ languages are available online. The “Buying Green” Handbook is also available online as are more than 100 GPP examples.

How much is being done in the EU? Results are mixed. By 2010 99.8% of public procurement at the national level in The Netherlands was green while provincial authorities had reached 96% and municipalities between 86% and 90%. However, a 2011 study showed that the 50% target had not been met across the EU although more than 50% of public authorities are doing some sort of GPP (Mr Kaukewitsch added the caveat that the study was based on surveys so the results is likely not be very accurate.)

There is a large difference between good and bad performers: The four top performing countries
applied GPP in 40-60% of cases while in 12 countries, it was done in less than 20% of cases. The top performers, according to different studies, are Belgium, Denmark, The Netherlands, Sweden and the UK.

The speaker highlighted some ambitious developments in Member States: In Denmark, the UK, The Netherlands and Germany, there is an obligation to buy timber only from sustainably-managed forests. The Netherlands province of Flanders has set an SPP target of 100%. An Italian law from 2015 obliges all public authorities to apply minimum environmental criteria for all procurement of goods, services and works with requirements for energy efficiency (50% of the other categories must be greened). Malta has established GPP targets for 18 product groups.

It takes time and effort to make progress. Frontrunner countries are usually characterised by having a long tradition of GPP, targets for achieving certain GPP levels, hard or soft obligations and developed and institutionalised, proactive capacity-building efforts.

The Commission is committed to providing support and to leading by example in its own procurement, and by reinforcing the use of GPP in EU funding. It is already taking action in areas such as furniture upgrades, which have saved money and resources. Nevertheless, there is still room for improvement.

Mr Kaukewitsch went on to cite some best practices. The city of Ghent has adopted a strategic approach to GPP. The procurement team works directly with the mayor’s office to slim down procurement processes, reduce purchased articles, incorporate LCC, integrate sustainability elements into all stages of a purchase and criteria in tenders and control of contracts. The cost savings have allowed for higher spending on other items where wanted, such as organic food. The city of Vienna has reduced CO2, saved money and reduced the use of toxic cleaning products.

GPP 2020 aimed to make low-carbon public procurement mainstream across Europe. While there are many successful SPP examples, projects and policies, there is little quantified information on the impacts. GPP 2020 worked with big buyers in 8 EU countries and quantified the impact by calculating the CO2 savings for each tender. Over 100 GPP tenders for energy related products and services were carried out and documented in Tender Models showing an estimated savings of 250,000 tonnes of CO2 equivalent. In addition a training series of over 40 seminars reaching 600 people have been conducted

The speaker concluded that the main elements of a strong GPP are political support (there needs to be a strong push from above) and a well-trained workforce. Officials must understand that GPP has a strategic function. Long term planning is essential as is dialogue with the market. It is more effective and makes sense to concentrate on the main environmental impact areas first. It is important to put monitoring procedures in place and, finally, to network internationally. 

Q&A

Given that Mr Kaukewitsch was in a video conference and he would not have been able to participate in the final panel session, the floor was opened for questions immediately after his presentation.

On a question about eco-labels, the speaker noted that new certain conditions for the use of eco-labels were set in 2016 (although not yet implemented in all EU countries) in order to make reference to them easier in public procurement. Under the conditions all requirements must be related to the product or service, not, for example, overall company policy.

On the question of LCC costing, the speaker admitted that the process is more complicated than anticipated. However, many authorities are doing analyses, for example of LED lighting LCC vs conventional lighting. 


Topic 3: The development and future of Taiwan railways

Speaker: Mr Wen Tai-Hsin (溫代欣), Chief Secretary, Railway Reconstruction Bureau, Ministry of Transportation and Communications (MOTC)

The speaker shared recent developments and future Taiwan railway projects. It is one of the government’s priorities to encourage greater usage of public transport, hence the ongoing development of all types of railway in Taiwan. The Taiwan High Speed Rail (THSR) system along the west coast has cut travel time from Taipei to Kaohsiung from 4.5 hours (using conventional rail) to 1.5 hours while the upgrading of existing rail lines along the eastern and southern coasts has cut travel time by a further 1.5 hours. Future development plans will cut travel times on the eastern and southern routes by another two hours (in total) by 2025.

Railway transport is also an important component of the government’s goal to cut CO2 emissions. In line with the national goal of cutting emissions to the same levels as the year 2000, the transportation sector will need to cut overall emissions by 9.66 million tonnes to 34.10 million tonnes. Another reason for the government’s focus on public transport is to meet the needs of an aged society.

Upgrades to railway lines include increasing capacity (building double or triple tracks) on some routes, increasing speed and electrification of the Hualien-Taitung line and the South link line (linking Taitung and Kaohsiung (the last section of Taiwan’s railway network not yet electrified). There are multiple metro rail system extensions ongoing and more in the works. In places where metro rail projects are not viable, more stations are being added to conventional rail systems for the convenience of residents in those areas and to encourage greater usage.

While the focus in western Taiwan is on inter-city transport and urban travel, eastern Taiwan is more geared towards local culture and tourism needs. Besides the transport facilities themselves, the MOTC is also working on ways to make travel more comfortable by upgrading pavements and public spaces and more seamless by integrating connections between trains and other types of transport.


Final panel discussion

Moderator: Mr Mark Chang, Senior Specialist, Department of Planning, PCC

The afternoon session was followed by an interactive and lively panel discussion featuring speakers from both the morning and afternoon sessions (with the exception of Mr Kaukewitsch). The discussion was moderated by Mr Mark Chang, Senior Specialist, Department of Planning, Public Construction Council. Speakers answered questions previously collected from the EPA and the MOTC as well questions from the audience.

On the question of what are the biggest obstacles to making progress in GPP, the fact that GPP is not mandatory is one. Another is a lack of resources or a lack of specialist knowledge. Another issue is that GPP is often seen as a separate administrative process, rather than something that is integral to the procurement process. There is also the perception that green products are more expensive. However, this is not true of lifecycle costs are taken into account. There is sometimes also the need for education and behavior change at the senior level. Panelists made the point that it is important to identify and set priority areas and targets. Many countries have different priorities. Different climates, for example, mean that there need to be different requirements for the construction sector depending on the type of climate in that particular country. The EU developed a prioritization method seven years ago. The flexibility in the framework allows different countries to set their own priorities. In summary, there are different problems at different authorities but there are solutions to all these problems.

Panellists made the point that Taiwan’s challenge is to change the mindset from the lowest bid to incorporate green issues and circular economy. There is also a need to balance GPP with timely delivery.

The point was made that even though the EU has mandatory targets, it took 20 to 30 years to get to this point. Mandatory targets help but they are not the only thing.

The UK has an eco-label directive, which allow for an eco-label or equivalent. This allows for other alternatives as long as the supplier can show that they are equivalent. The advantage of this is that it allows the market to come up with even better solutions than basic regulations thereby creating opportunities for the market.

The Netherlands uses total cost of ownership methods but allows vendors to come up with ways to reduce costs and meet the requirements. This passes on responsibility to suppliers.

The point was reiterated that coming up with LCC models is difficult. However, once they have been created they can be used for future projects, making the initial effort worthwhile. GPP can also be used to set goals for the market. For example, the UK’s Olympics organisers asked for products that were not yet available and gave the market two years to come up with solutions, which they subsequently did successfully. This demonstrates that GPP can also be used to spur innovation.