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How to write a Carbon Reduction Plan for public procurement compliant with PPN 06/21

From September 2021 all firms bidding for major contracts worth over £5m for Central Government and arms-length public bodies must submit a "clear and credible" Carbon Reduction Plan that details their commitment to achieving net zero emissions by 2050. For many businesses this may be their first exposure to carbon footprinting.

For now, the £5m threshold means that the requirement will be mandatory for major contracts only, however it remains to be seen whether it is adopted for smaller contracts and by local authorities for their procurement projects.

This article gives a brief explanation of a compliant carbon reduction plan and explains how to go about writing one.

What does a Carbon Reduction Plan consist of?

A compliant carbon reduction plan consists of 6 elements:

  1. A declaration of the organisation's commitment to achieving net zero emissions (including a target year)
  2. Baseline emissions footprint (this is a calculation of the organisation's carbon footprint against which all future plans will be compared)
  3. Current emissions report (the emissions from the most recent year calculated - must be less than 12 months old)
  4. Emissions reduction targets (5-year reduction target and report of progress against pre-existing targets)
  5. Carbon Reduction Projects that have been completed and that you plan do to in the future (including environmental management measures, certification schemes or specific carbon reduction measures that will be in effect during the performance of the contract)

  6. Declaration and Sign Off (a director must sign off the plan)

The carbon reduction plan must be published on your website.
    Click here to see an example plan

    Who does PPN 06/21 apply to?

    The procurement note applies to any organisation wishing to bid for all Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies when procuring goods and/or services and/or works with an anticipated contract value above £5million per annum (excluding VAT) averaged over the life of the contract from September 2021.

    It is important to realise that the requirement to supply a carbon reduction plan is at the time the bid is submitted. So, if a compliant plan is not submitted the bid will not go forward into the procurement process.

    There is a "related and proportionate" clause but the guidance makes it clear that most contracts over £5m are expected to comply.

    The guidelines are clear that the bidding organisation will not be scored based on the emissions reported or on the quality of the measures planned. It is simply a PASS/FAIL based on providing the information required.

    Click here to view all the official requirements and guidelines

    Preparing to write your plan

    The most important thing to do in preparing to write your plan is to calculate the carbon emissions, not only of your energy use, but also of some elements of your value chain. If you have not done this before, or if you have only reported your Scope 1 and 2 emissions (the emissions from your energy use as required by SECR) then you need to make this a priority as in our experience it will typically take 8-16 weeks to do first time round.

    The emissions you need to calculate are:

    Scope 1

    • Emissions from Fuels used in your operations
    • Direct release or escape of Greenhouse Gases in your processes
    • Emissions from Vehicles owned by your organisation

    Scope 2

    • Emissions from the Electricity and/or Heat and Steam that your purchase

    Scope 3

    • Emissions from the transportation or storage of materials and products in or out of your organisation using vehicles or facilities not owned by your organisation. Note: you need to account separately for those that your organisation pays for and those that your customer pays for.
    • The emissions from the disposal and treatment of any waste generated in your operations
    • The emissions from Business travel by your employees, whether in their own vehicles, hired vehicles or public transport.
    • The emissions from Employees commuting into your facilities. Note it is optional whether to include emissions due to the energy use of employees working from home but we would strongly recommend including this if home or flexible working is a significant part of your operations.
    The government publish guidance on how to calculate your emissions here

    You need to calculate two sets of emissions:

    1. Your Baseline emissions are those from the year that you are comparing your reductions against. You can think of this as the starting point for your plans.
    2. Your "Current year" emissions. These are the emissions from the last 12-month period for which you did the calculation. Note: If this is within 12 months of the commencement date of the procurement you do not need to calculate it again (ie. this is not expected to be a "rolling 12 months). We recommend aligning your annual emissions calculation with your financial year.

    If this is the first time you have calculated your emissions, your Current year will be the same as your Baseline year.

    Setting a target date and reduction targets

    The next things to do are to set the target date to achieve net zero emissions and set reduction targets for the next 5 years.

    If this is the first time you have created a carbon reduction plan we would make the following recommendations:

    1. You don't need to be too ambitious. To start with a net zero target date of 2050 is quite ambitious and until you have either been through a few annual cycles of carbon planning or have completed a detailed net zero roadmap you will not know what a credible target for your organisation is.
    2. There is a general scientific consensus that we need to cut our emission in half by 2030. We recommend targeting a reduction of around 35% for the first 5 years as this is when you will tackle the "low-hanging fruit" and reductions will likely get progressively more challenging as time goes on.

    Think about how you will manage your carbon reduction going forward

    Achieving net zero emissions is a long-term project that will need a consistent focus on making year-on-year reductions. We strongly recommend embedding a carbon management system into your operations so that carbon reduction becomes part of the way you do things, just like growing your profits.

    We recommend adopting an annual process like the one illustrated below:

    Alternatively, you could implement an externally accredited environmental management system such as ISO14001 or our own Go Climate Positive programme.

    Completing your Carbon Reduction Plan

    If you have done your preparations well then completing your plan is the easy bit. The government guidelines contain a template for your plan and we have created two versions you can download and use straightaway.

    Download a carbon reduction template in Microsoft Word format

    Download a carbon reduction template in PDF format 

    Publishing your Carbon Reduction Plan

    The PPN requires you to publish your latest Carbon Reduction on your UK website. A link to the plan should be placed on a prominent place on your homepage. It is also suggested that previous CRPs should be made available on your website so that your progress can be monitored. If you do not have a website, you must provide a copy of the statement in writing to anyone who requests one within 30 days.

    Next steps

    The most important next steps are to read the guidance and to calculate your emissions.

    If you don't have time, or you want the reassurance of someone to help you through the process get in touch. Our Carbon Coaches have an in-depth understanding of the requirements and can walk-you though the process step-by-step, we can even do the calculations for you.

    Contact us for help with completing your Carbon Reduction Plan.

    Written by Eoin McQuone

    Eoin (pronounced like "Ian") is the Chief Carbon Coach and founder of Go Climate Positive. He is a Practitioner member of IEMA (the Institute of Environmental Management) and a sustainability lead on the Cheltenham Economic Recovery Task Force.

    Eoin says, "Sustainability is no longer a 'nice to do', it is business critical. My goal is to make it accessible and affordable for every business, however big or small , no matter their market sector."

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