Breakthrough on Green Procurement in China

Although largely unnoticed by Western media, the announcement by the Chinese Ministry of Finance has the potential to massively cut carbon emissions

After two years of lobbying and considerable investment by the UK, the Chinese Ministry of Finance (MOF) has announced that green procurement will form a central part of its work plan for 2013.

The potential for emissions reductions is huge. Not only is the MOF responsible for over $160 billion of government buying alone, it has also been tasked to draw up a single list of Low Carbon Products, the next of which is due to be published in July 2013. This may then be adopted by the powerful National Development and Reform Commission (NDRC).

According to the European Chambers of Commerce in China, this would cover up to an astonishing $1.09 trillion of government procurement.

China Proc

The announcement is set to greatly increase the proportion of MOF’s public procurement which is spent on energy saving and environmentally protecting products – currently at 14.5%. It should also help improve China’s record of “poor implementation” of existing sustainable purchasing policies, which it has been discussing since 2004.

While China’s massive investment in new coal power stations, wind farms and PV tends to grab the energy headlines, this procurement announcement has potential to be very significant.

After all, there is broad consensus that China’s energy demand will continue to grow in the coming decades as its citizens get wealthier. The need to make energy-saving widely acceptable and desirable in all aspects of Chinese economic growth is essential if China (and the world) is to meet climate goals.

The government must lead by example when it comes to procurement, and its powerful ministries means that it is well placed to do so.

A further positive outcome is that UK companies offering a range of ‘eco-products’, such as windows, fridges and lighting, have a green light for investing in this massive market. The UK’s Carbon Trust has been working in China since 2008 to enable such opportunities and also to share best practice with Chinese businesses.  

Considering that China forms an important part of most multinational companies’ supply chains it is vital that Chinese businesses take steps to reduce their environmental impact. The government’s green procurement plan will help kick-start this massive undertaking.   

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