Rethinking public procurement: 10 ways the EU can drive climate impact and market transformation

Public procurement is a powerful tool that can shape Europe’s transition to a sustainable, resilient, and competitive economy. With governments and public institutions collectively spending around 14% of the EU’s GDP on procurement, the way they buy goods and services has a profound impact on market dynamics, climate action, and innovation.

Why public procurement matters to scale climate action and Europe’s resilience

What we’ve learned working with the 112 cities participating in the EU Cities Mission programme, NetZeroCities, led by Climate KIC is that sustainable procurement is a critical enabler of climate neutrality and lead markets creation. These cities require innovative, green solutions across number of crucial sectors: in energy, mobility, digital infrastructure, construction, and food systems.

Concretely, by embedding sustainability criteria into procurement processes, public authorities can:

• Scale climate-friendly innovations by creating substantial demand for clean technologies across the EU Single Market,
• Support circular economy principles and market creation by prioritising recyclable and repairable products,
• Reduce carbon emissions through criteria that favour sustainable materials or energy efficiency,
• Enhance economic resilience by fostering domestic green industries and reducing reliance on unsustainable imports.

Climate KIC’s call for smarter procurement policies

As part of the European Commission’s consultation on the effectiveness of public procurement directives, Climate KIC has put forward ten recommendations to make procurement a driver of systemic change:

• Strengthen green procurement enforcement: Introduce financial penalties for non-compliance and create an EU Green Procurement Watchdog.
• Facilitate joint and transnational procurement: Help cities and regions pool demand for sustainable solutions to increase impact.
• Expand MEAT+ (Most Economically Advantageous Tender) criteria: Move beyond cost-based decisions and prioritise sustainability and innovation in tender evaluations.
• Enhance transparency and digitalisation: Require digital reporting on green criteria and establish an EU-wide Green Procurement Scorecard.
• Prioritise circular economy practices: Make sustainability standards on recycled materials, repairability, and sustainable sourcing mandatory.
• Lower barriers for SMEs & start-ups: Reduce red tape and ensure greater participation of innovative small businesses in green procurement.
• Boost pre-commercial procurement (PCP): Use PCP to accelerate the adoption of cutting-edge climate solutions.
• Integrate carbon footprint in award decisions: Make CO₂ reduction a core element of procurement tenders.
• Enforce mandatory green public procurement (GPP) targets: Set legally binding GPP thresholds for high-impact sectors.
• Define innovation in procurement rules: Clarify definitions to ensure legal certainty and enable strategic purchasing.
  Mobilising concrete action

In March 2025, Climate KIC hosted a Strategic Public Procurement & Pre-Commercial Procurement (PCP) Meeting to help cities implement impactful procurement strategies. Additionally, we are engaging policymakers, industry leaders, and procurement officials through Policy Labs and Cities-Industry Dialogues.

Public procurement must evolve from a cost-driven mechanism to a strategic force for Europe. With the right policies and enforcement mechanisms in place, procurement can drive sustainable lead markets, foster innovation, and accelerate the EU’s journey towards climate neutrality.

Katarzyna Balucka-Dębska, Head of EU Policy at Climate KIC, says: “Public procurement must evolve from a cost-driven mechanism to a transformative and strategic force for Europe’s climate and competitiveness ambitions. With the right policies and enforcement mechanisms in place, procurement can drive sustainable lead markets, foster innovation, and accelerate the EU’s journey towards climate neutrality. By integrating sustainability criteria, circular economy principles, and innovation into procurement frameworks, we can build resilient markets that benefit both citizens and the environment.”

Read our ten suggestions for Public Procurement Directives to ensure resilience, achieve strategic autonomy, build EU-wide lead markets based on sustainability principles.