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Procurement for a net zero emissions economy

Climate change is one of the greatest challenges of our time. It’s something that we are all increasingly conscious of in our own lives, when we do the recycling, fuel up the car, or decide whether to insulate, we are making decisions that will help or hinder New Zealand’s transition to a net zero emissions economy. As procurement practitioners for government this challenge is increasingly a core part of our jobs as well.

On 1 October the 4th edition of the Rules came into force, including a new requirement for government agencies to reduce emissions and waste from their procurements. Agencies must transition their fleets by 2025/26 to hit a zero emissions target, and take steps to lower emissions and waste from their buildings, and office supplies.

This new direction presents a real shift in focus for many in the industry - but there is now a strong urgency to take action. New Zealand has agreed to international commitments at the World Trade Organisation on driving down our emissions, consistent with achieving no more than 1.5 degrees of global warming. In 2019 the Zero Carbon Bill was established, including binding carbon budgets for the government.

What this means is that the government must either reduce emissions or offset them by planting trees or buying carbon credits. Both of these options are going to be costly, some costs will be borne by government, some by industry, and some by every day New Zealanders.

Not to fear though, government procurement has an important role to play and is doing its part to lower emissions. It accounts for 12 per cent of New Zealand’s gross domestic product, so how we engage with our suppliers and set priorities under our contracts can have significant effects on net carbon emissions.

Agencies are already leading in this space. The New Zealand defence force has implemented a strategy to lower its carbon footprint, starting by measuring their emissions and setting clear targets for reductions overtime. The Greater Wellington Regional Council is leading by example in their latest office conversion in Cuba Street. By keeping sustainability in mind, they have lowered their energy requirements compared with their old offices. This is saving them money and contributing to lowering emissions.

You will also see changes to the All-of-Government contracts to help agencies collectively lower their emissions and waste. The All-of-Government vehicles contract includes more electric vehicle options and will continue to be refreshed as new technologies emerge, giving agencies access to the newest innovations. The Office supplies contract now includes more sustainable alternatives, and across the portfolio, changes are being made to update and improve these contracts to support environmental outcomes.

Your agency can also do its part by lowering emissions and waste from procurement and property management. Think about how a new purchase will impact your agency’s carbon footprint, not just its budget, and weigh up the benefits to New Zealand’s collective target. This is now part of best practice for commissioning significant government projects and is reflected in a new requirement for Cabinet papers to include climate impact assessments from 1 November 2019.

For example, every time you buy an electric vehicle (EV) instead of a combustion engine, not only do you reduce your fuel consumption during the time your agency owns the vehicle - these carbon savings will continue when you on sell - supporting the development of an affordable second hand market for EVs. In this way the government can be a catalyst for change. And at the end of the day - when the government picks up its bill for its mandated carbon budget, it might be just that little bit lighter, thanks to the efforts of government procurers and property managers.

You can find guidance and support on Hīkina and New Zealand Government Procurement and Property website under broader outcomes. The Ministry for the Environment and the Energy Conservation Authority also have useful resources available online, including how you can monitor your emissions.

Hīkina – Learning for Government Procurement and Property

Broader outcomes

Ministry for the Environment: Guidance helps New Zealand organisations track their greenhouse gas emissions

Energy Conservation Authority: Saving energy and emissions