Delivering zero-emissions: Oslo leverages procurement to take the lead
Oslo Municipality has set itself the ambitious target of reducing greenhouse gases (GHG) of 95% by 2030. The strategy towards achieving this ambitious target includes the use of public procurement as a cornerstone for implementation. Taking stock of emissions in Oslo has shown that transport is decidedly the largest source of both greenhouse gas emissions and air pollution, such as particulate matter and nitrogen oxides. In addition to efforts of reducing traffic volumes, the municipality is addressing this issue by setting clear objectives for transitioning towards Zero Emission delivery of goods and services. Almost all goods, services and works procured will involve transportation – whether this relates to the direct delivery of goods to the public administration, the movement of workers carrying out a publicly contracted service, or the distribution of goods used whilst in carrying out works or service contracts.
Oslo participated in the EU-funded project ‘BuyZet’, together with GLCN City Rotterdam and Procura+ Participant Copenhagen. The project enabled the three cities to calculate emissions of delivery processes to the public sector. Oslo’s mapping exercise demonstrated that the emissions associated with facility waste management, as well as building maintenance and repair services are significant to the overall transport emissions. Based on this key insight, Oslo developed a thorough, iterative method leveraging market dialogue and environmental requirements that enable procurers to help achieve the ambitious targets of zero-emission, last-mile delivery.
Why engaging the market is helping to achieve zero-emission
From Oslo’s experience, market dialogue before the actual tendering process is important to gain knowledge about suppliers’ readiness to introduce Zero-Emission Vehicles (ZEVs) in contracts. The engagement with potential suppliers may also reveal unknown opportunities and barriers to using ZEVs. In this case, the Procurement Unit has prepared an interview guide to be used for market dialogue sessions.
For the tender itself, Oslo goes beyond minimum requirements but harnesses award criteria and contract requirements as tools to integrate environmental aspects towards zero-emission vehicles and fuels.
Award criteria can decide who gets the tender
Oslo’s approach outlines a prioritization of Hydrogen vehicles or 100% battery-driven electric vehicles over Biogas vehicles over vehicles that use other sustainable fuels. For the latter two, the approach specifies that vehicles using plug-in hybrid technology with a minimum range of 50 km on electricity will score slightly higher than vehicles that do not. Also, vehicles with high payloads (2,000 kg or more) will score the highest. A gradual reduction in points for vehicles with lower payloads. And vehicles that will be ready from the contract start date will score the highest. A gradual reduction in points for vehicles that will be introduced during the first year of the contract. Oslo provides guidance on weighting the criteria, taking into account the sector and type of procurement i.e. goods or services.
First-hand experiences from agreements on Mobile phones and Occupational health services have already demonstrated that the environmental performance specified in bids were decisive, meaning that the suppliers won the contract based on their ability to use ZEVs.
The challenge of contract requirements
Oslo’s approach includes another option for procurers to include environmental requirements in tenders towards ZEVs, namely as part of the normal contract follow-up. An example for such requirement would be ‘the Supplier must, during the first year of the contract period, switch to sustainable fuels for all vehicles that use fossil fuels.’ However, the challenge of using contract requirements in relation to transport is that it is difficult to know, with certainty, how far suppliers are willing to go. Oslo’s experience suggests that contract requirements for the environment are often too “lenient” or not ambitious enough.
Replication and leadership
By design, Oslo has built-in further learning and replication mechanisms as a means to advance their established procurement method as well as to encourage other municipalities to follow-suit towards zero-emission delivery. For example, the aim is to guide already experienced procurement officers across departments to not only include criteria on vehicles and fuels but also to consider the mode of transport, route optimization and driving behaviour as part of upcoming tenders towards zero-emission delivery. Oslo actively contributes to replication of this procurement practice for example by sharing their procurement plan and lessons learned with a select group of observer cities as well as in the form of guidance material, which can be accessed here.
Every product purchased by a public administration must be delivered, whether paper clips or streetlights. The majority of services purchased by public administration involve the movement of goods and personnel, whether cleaning services, road maintenance, or waste collection. If cities are to achieve targets of zero-emission transport, the delivery stage is a key area where innovative solutions need to be mainstreamed.
However, the GLCN city is a lighthouse for zero-emission procurement beyond transport. Another pioneering area the city is working on is the procurement of zero-emission construction sites by 2050. Learn more about Oslo’s procurement targets and strategy here.