EU Public Procurement Act: ESG aspects of the Commission’s proposal

On 9 September 2026, the European Commission adopted a proposal for a Regulation on public contracts and concessions (the "Public Procurement Act"). See also the press release, Q&A and Factsheet. 

If adopted, the Public Procurement Act will repeal Directive 2014/23/EU (concessions), Directive 2014/24/EU (public procurement) and Directive 2014/25/EU (utilities). It consolidates these Directives into a single, directly applicable Regulation. It also amends ten further Regulations and five Directives. 

The Public Procurement Act reforms the EU public procurement framework, including on procedures, selection and award, digital infrastructure, third-country access, security and resilience, and governance. The Commission aims to make public procurement simpler, more flexible, and more effective. In this blog post we look at the key ESG aspects of the Commission's Proposal. 

Environment and social considerations in award criteria

The Commission's Impact Assessment identifies the limited use of quality considerations in award criteria as one of the key drivers of low environmental, social and innovation uptake in EU public procurement. Price-only awards accounted for 37% of all procedures between 2017 and 2024, up from 30% in 2006 - 2010. Environmental criteria featured in only 28% of framework contracts and 22% of one-off contracts. Where award criteria do not include qualitative environmental, social and innovation requirements, the corresponding solutions are not incentivised.

The Proposal makes the best price-quality ratio the standard award method. It sets a minimum quality weighting of 30% of total points, rising to 50% for labour-intensive contracts, subject to a narrow "comply or explain" mechanism. Quality is defined as a non-exhaustive list that expressly includes environmental, climate-related and social considerations. 

Green public procurement 

Article 50 of the Proposal turns green public procurement (GPP), which has been a voluntary EU concept, it into a defined legal term. The measures included therein are in principle facultative. However, Article 54 lays the ground for the Commission to make GPP requirements mandatory for products, product families or technologies covered by the legal acts listed in Annex VII.

"Green public procurement" is defined as procurement in which public buyers take environmental and climate-related considerations into account with a view to preventing, reducing or otherwise mitigating adverse environmental and climate-related impacts, or pursuing positive impacts, throughout the life-cycle of the products, services or works, as compared to alternatives with the same primary function. The Proposal ties GPP to the following objectives: 

• climate change mitigation (including emission reductions); 

• climate resilience and adaptation; 

• sustainable use and protection of water and marine resources; 

• transition to a circular economy, including through bioeconomy; 

• pollution prevention and control; and 

• the protection and restoration of biodiversity and ecosystems. 

Environmental and climate-related considerations may be embedded in specifications, award criteria, contract performance clauses or selection criteria, provided they are linked to the subject-matter of the contract. 

Mere compliance with general minimum environmental obligations under the EU law, national law or the international conventions listed in Annex II does not qualify as GPP. Only procurement that integrates specific GPP environmental criteria or requirements set under the Proposal or other relevant EU legislation counts.

Article 54 envisages that, when procuring products, product families or technologies subject to the legal acts listed in Annex VII, public buyers shall require, in specifications, award criteria or contract performance clauses such environmental characteristics as they consider appropriate. The Proposal empowers the Commission, where diverging requirements risk fragmenting the internal market or where demand for the product in question needs to be fostered, to specify those environmental characteristics by delegated act. Buyers may derogate only in narrowly defined cases: single-source technical reasons, or disproportionate cost or technical incompatibility.

Circular economy

Article 51 of the Proposal allows public buyers to build durability, reparability, upgradeability, reuse, refurbishment, remanufacturing, recycled content, use of secondary raw materials, waste prevention and preparation-for-reuse requirements into any stage of the procurement, and to adopt product-as-a-service, leasing, sharing or rental models rather than purchasing new. 

Energy efficiency

Article 52 requires public buyers, when purchasing goods, services or works, to purchase only products, services and works with a high energy efficiency performance unless not technically feasible. This obligation is subject to carve-outs for deep renovation, demolition and heritage buildings.

Socially responsible public procurement

Article 55 covers socially responsible public procurement, including social inclusion and labour market integration of persons with disabilities and disadvantaged persons, high-quality jobs including through collective bargaining, accessibility, upskilling and reskilling, gender equality, non-discrimination, the social economy and effective protection of human rights across supply chains. As with Article 50, mere compliance with applicable obligations under the EU law, national law, collective agreements or the international environmental, social and labour law conventions listed in Annex II is not socially responsible public procurement. 

Subject-matter link and life-cycle

Any ESG criterion applied in specifications, awards or contract conditions must be linked to the subject-matter of the contract. Recital 40 lists examples that fall within the subject-matter link: that the manufacturing of the purchased products did not involve toxic chemicals; that the services are provided using energy-efficient machines or energy-efficient production methods; that the product concerned is of fair-trade origin, including a minimum price and premium to producers. Criteria relating to "general corporate policy" are not considered linked. 

The Proposal also gives a broad definition of "life-cycle", covering all consecutive or interlinked stages, including research and development, raw-material acquisition or resource generation, production, trading and transport, use and maintenance, and disposal and end-of-service. Read together with Article 90, the life-cycle definition pulls those upstream and downstream stages inside the subject-matter link, so a public buyer may legitimately address them in specifications, awards or performance clauses.

Life-cycle costing

Article 99 lets public buyers score tenders on life-cycle cost, not just on the purchase price. They include the cost of using the product, service or works, such as energy use and other resource consumption, maintenance costs and end-of-life costs such as collection and recycling.

Public buyers may also include a monetary cost for the environmental and climate impacts of the tender over its life-cycle. This can cover greenhouse gas emissions and other pollutant emissions, as well as costs linked to climate change mitigation. This is conditional on the possibility of the monetary value of those impacts to be determined and verified. 

Exclusion for environmental breach

The Proposal makes environmental criminal offences as well as violation of EU restrictive measures under the EU Sanctions Enforcement Directive a mandatory exclusion ground. It also makes it optional (but expressly permissible) to exclude an economic operator that has breached applicable environmental, social and labour-law obligations under the EU law, national law, collective agreements or the international environmental, social and labour law conventions listed in Annex II.

Contract performance clauses and the interface with CSDDD

Article 104 lets public buyers add strategic clauses to the contract itself, so that the winning bidder has to deliver on specific environmental and social outcomes during performance. The clauses can cover five types of matters:

• environmental matters as defined in Article 50, for example the handling of waste, compliance with sustainability due diligence and reporting during performance of the contract, or other circular economy requirements;

• employment matters, such as fair working conditions, remuneration, and occupational health and safety;

• other social matters as defined in Article 55, for example putting in place appropriate processes to prevent and mitigate human rights impacts that arise in the performance of the contract;

• innovation; and

• security and resilience.

The sustainability due diligence language in Article 104 tracks the Corporate Sustainability Due Diligence Directive (CSDDD) closely. The Act also makes a targeted amendment to the CSDDD itself. It deletes Article 31 of the CSDDD and provides that references to that Article are to be read as references to Article 55 of the new Regulation. For more information on the CSDDD, see our CSDDD Quick Guide. 

Concessions

Article 121 requires public buyers to include in concession contracts provisions aimed at ensuring the long-term efficiency of the works or services, including by promoting environmental sustainability and technological innovation throughout the duration of the concession. Those provisions may in particular include requirements relating to the contribution to the environmental and climate-related objectives under Article 50.

Is national transposition required?

By choosing Regulation over Directive, the Commission would like to avoid divergence in transposition across Member States, including potential "gold-plating". The Regulation would apply directly in all Member States without transposition.  

In practice, however, Member States will need to carry out a very substantial unwinding of their current national procurement frameworks. The three repealed Directives are implemented today by national procurement codes, supplemented by sectoral national laws and secondary legislation, guidance and procedures. Member States will need to repeal or substantially amend their national procurement frameworks. The proposal defers application by two years from entry into force, to allow for the scale and novelty of the reforms.

Next steps 

The Proposal now enters the ordinary legislative procedure. The European Parliament and the Council must each adopt their position at first reading. On a file of this scale, divergent positions are likely, and the compromise text will be settled in trilogue negotiations between the co-legislators, with the participation of the Commission. It may take between 18 and 24 months for the Proposal to be adopted.