In this article, we provide a simple guide to the UK Government’s procurement policy note 06/21, for businesses that want to sell their goods or services into the public sector. Find out everything your Carbon Reduction Plan needs to include, to prevent the risk of exclusion from the procurement process.
What is PPN 06/21?
Procurement Policy Note 06/21, or PPN 06/21, is a UK Government document that sets out for public sector entities how suppliers’ carbon reduction plans and commitment to Net Zero should be taken into account in the procurement of contracts worth £5m or more per annum (excluding VAT).
If your organisation wishes to sell goods or services to any government entity in the order of £5m per annum, you need to be measuring and managing your scope 1, 2, and a number of your scope 3 carbon emissions, and reporting on your reductions in a carbon reduction plan (CRP).
Why did the government create PPN 06/21?
In 2019, the UK government established a target to reduce greenhouse emissions by 100% (compared to 1990 levels) by 2050. Their Net Zero target was made legally binding by the Climate Change Act 2008 (2050 Target Amendment) Order 2019.
PPN 06/21 supports this target by ensuring that larger government contracts are completed by organisations with carbon reduction targets that are aligned with the Government’s Net Zero by 2050 target.
The PPN is designed to assess whether the organisation bidding for the contract has taken the necessary steps to understand their environmental impact and carbon footprint, relevant to the delivery of the contract.
What should our Carbon Reduction Plan include to comply with PPN 0621?
Any organisation that wishes to sell goods or services to the public sector worth over £5m per annum must create and publish on your website a CRP that:
Has been signed off at an appropriate level within 12 months of the procurement date
Includes a signed declaration confirming your organisation’s commitment to achieving Net Zero by at least 2050
Details your organisation’s Scope 1, Scope 2, and a subset of Scope 3 Greenhouse Gas emissions
Details the carbon reduction measures that can be applied in the delivery of the contract
If a supplier fails to meet the full CRP requirements as detailed in PPN 06/21, then they will be excluded from the procurement process.
What are the different scopes of greenhouse gas (GHG) emissions?
The GHG Protocol breaks down emissions sources into three categories or ‘Scopes’:
Scope 1 emissions: Direct GHG emissions that occur from sources that are controlled or owned by the reporting organisation, e.g. emissions associated with fuel combustion in boilers, furnaces, vehicles.
Scope 2 emissions: Indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat, or cooling, as a result of the organisation’s energy use.
Scope 3 emissions: Indirect emissions both upstream and downstream of the organisation’s activities, from all other sources not within an organisation’s scope 1 and 2 boundary. Scope 3 often represents the majority of an organisation’s total GHG emissions.
Which Scopes of GHG emissions must our Carbon Reduction Plan report on?
Your CRP must include all Scope 1 and Scope 2 UK emissions, along with five Scope 3 emission categories:
Business travel
Employee commuting
Waste generated in operations
Upstream transportation and distribution
Downstream transportation and distribution
Will my organisation be preferred if we set an earlier target for reaching net zero in our carbon reduction plan?
Currently, the guidance is for CRPs to be used only as a check that each bidder meets the requirements of the measure, and not as a way to score or compare potential suppliers. This means that if one supplier commits to achieving Net Zero by 2030, while another commits to achieving Net Zero by 2050, both will pass, but neither will score any higher or gain an advantage.
How often do we need to update our Carbon Reduction Plan?
Your organisation’s CRP should be reviewed and updated annually to reflect changes in organisational structure and to take account of your efforts to reduce GHG emissions over time. Organisations are encouraged to report on emissions in line with their financial year, to ensure the most accurate and meaningful data.
Your Carbon Reduction Plan should be reviewed and updated within 6 months of your organisation’s financial year-end, and when bidding for a new contract, you must ensure that the reporting period of your CRP is no more than 12 months prior to the date of commencement of the procurement.
How should we calculate our carbon footprint for our CRP?
Your carbon footprint should be completed in accordance with best industry practice, using the best and latest data you have available. Measurement of your carbon footprint should be in line with the GHG Protocol’s Corporate Accounting and Reporting Standard.
Which greenhouse gases do we need to measure?
All seven greenhouse gases named by the Kyoto Protocol must be reported on in your carbon footprint:
Carbon Dioxide (CO2)
Hydrofluorocarbons (HFCs)
Methane (CH4)
Nitrous Oxide (N2O)
Nitrogen Trifluoride (NF3)
Perfluorocarbons (PCFs)
Sulphur Hexafluoride (SF6)
Greenhouse gases should be measured in tonnes of CO2-equivalent, which is one metric tonne of carbon dioxide, or the amount of any other greenhouse gas with an equivalent global warming potential.
Want help creating your Carbon Reduction Plan for PPN 06/21?
Avoid delays in submitting your bid, and gain total confidence that your Carbon Reduction Plan will be compliant with the requirements of PPN 06/21.
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