Procurement Policy Note 06/21:

Taking account of Carbon Reduction Plans in the procurement of major government contracts

Procurement Policy Note 06/21 applies in the procurement of major UK Government contracts for goods / services / works with an anticipated contract value above £5 million per annum and which are subject to the Public Contracts Regulations 2015. Government Departments, their Executive Agencies and Non Departmental Public Bodies must take of suppliers’ Net Zero Carbon Reduction Plans.

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Requirements for organisations

Government suppliers are required to:

Provide a Carbon Reduction Plan (CRP) to achieve Net Zero by 2050.
Complete a carbon footprint of Scope 1 and 2 emissions including subset of Scope 3 emissions.
CO2e (Carbon Dioxide Equivalent) reporting for the seven greenhouse gases covered by the Kyoto Protocol.
Set out carbon reduction measures when performing the contract.
Publish their Carbon Reduction Plan on the supplier’s website.

The organisation’s Carbon Reduction Plans must confirm commitment to achieving Net Zero by 2050 at the latest which is consistent with the UK Governments commitment to achieve Net Zero by the same date. To meet PPN 06/21 requirements the Carbon Reduction Plan should be reviewed and updated annually.

The organisation’s carbon footprint should be completed using best industry practice, for example the Greenhouse Gas Protocol’s Corporate Accounting and Reporting Standard. All Scope 1 and 2 carbon emissions must be recorded and reported.

Scope 1: Direct greenhouse gas emissions - generated from the following activities undertaken by the organisation

Generation of heat, steam or electricity from sources such as boilers, turbines.
Transportation of materials, products and employees where company has ownership or control, for example cars, buses, lorries.
Physical or chemical processing resulting in emissions from manufacture or processing of chemicals and materials, for example cement, aluminium, and waste processing.
Fugitive emissions resulting from intentional or unintentional releases, for example hydrofluorocarbon (HFC) emissions leakage during the use of refrigeration and air conditioning equipment.

Scope 2: Electricity indirect GHG emissions

Organisation report the emissions related to purchased electricity consumed by owned or controlled equipment or operations as scope 2.

For many organisations it can be the largest source of greenhouse gas emissions and provide the greatest opportunity to reduce carbon emissions.

Scope 3: Other indirect GHG emissions - emissions can be as much as 80% of an organisation’s greenhouse gas emissions

In completing the Carbon Reduction Plan to meet PPN 06/21 requirements suppliers must detail their emissions relating to 5 of the possible 15 categories Scope 3 emissions.

Upstream transportation and distribution.
Waste generated in operations.
Business Travel.
Employee commuting.
Downstream transportation and distribution.

The seven greenhouse gases required to be reported and named in the Kyoto Protocol are:

Carbon Dioxide (CO2)
Hydrofluorocarbons (HFCs)
Methane (CH4)
Nitrous Oxide (N2O)
Nitrogen Trifluoride (NF3)
Perfluorocarbons (PCFs)
Sulphur Hexafluoride (SF6)

How the Green Business Centre can help

We can help organisations by calculating and preparing their SECR submission to be included in the annual Directors Report including energy consumption, greenhouse gas emissions, energy efficiency improvements implemented and an energy intensity metric.