Public procurement

Finland’s public procurement expenditure was approximately EUR 35 billion in 2010, or approximately 19 per cent of Finland’s GDP. The majority, i.e. almost three thirds, of this expenditure is attributable to local authorities, joint authorities and other municipal organisations.

Businesses, administrative bodies and other organisations can reduce the environmental impacts of their operations, and also cut costs, by buying environmentally friendly goods and services. This also promotes the development of environmentally friendly products and increases demand for them.

  • EU law and the World Trade Organization stipulate that certain principles must be followed in all public procurement. These principles include economic efficiency, openness, competitiveness, non-discrimination and the free movement of goods. Public procurement is regulated by the Finnish Act on Public Contracts, which is based on the European Public Contracts Directive. A new Public Contracts Directive is due to enter into force in early 2014, at which time a reform of national public procurement legislation will also begin.
  • The European Energy Services Directive (2006/32/EC) and the European Commission’s climate and energy package stipulate that the public sector must set an example and instigate actions relating to energy efficiency and lowering energy consumption. The Finnish Act on Consideration for the Energy and Environmental Impact of Vehicles in Public Procurement (1509/2011) stipulates that procurement authorities must take the lifetime energy and environmental impacts of a vehicle into consideration when buying motor vehicles for road transport.

Public sector a trendsetter in sustainable procurement

On 13 June 2013, the Finnish Government adopted a resolution concerning the promotion of new and sustainable environmental and energy solutions in public procurement. The objective of the resolution is to lower energy and material consumption, to reduce harmful environmental impacts during the entire life cycle of products, services and buildings and to create incentives for the development and adoption of new cleantech solutions. The public sector must promote these kinds of solutions in all procurement, but especially with regard to construction, the energy sector, transport and waste management.

The objective is for the public sector to procure new cleantech solutions with at least EUR 300 million every year. This equates to approximately one per cent of total public procurement expenditure and would double current public research, development and innovation spending on cleantech solutions.

The goal in all government procurement is to find an integrated solution that both promotes energy and environmental objectives and makes use of new cleantech solutions in the most cost-effective manner. When planning procurement, government procurement units must make use of life cycle costing tools and calculators and take account of any potential to use new cleantech solutions.

In addition to these general objectives and principles, the Finnish Government has also set specific targets for certain sectors that are particularly important for reaching the objectives. These include waste management, electricity, property development, transport, energy-related products, services for which ecolabel criteria have been established, as well as food and catering.

The Government Resolution is binding on government procurement units and recommended for other public procurement units. The resolution applies to all procurement, not just public contracts that are governed by national legislation.

Further information:

Taina Nikula, Counsellor,
Ari Nissinen, Leading research scientist (PhD), Finnish Environment Institute,

Published 2013-12-17 at 10:34, updated 2013-12-19 at 12:52