Greening public sector procurement offers a key opportunity for governments to hit decarbonisation targets, a public policy think tank says.

A new report from the Centre for Policy Development (CPD) recommends a series of changes to state and federal procurement policies to support the growth of emerging green industries like green steel and green hydrogen.

The CPD says if the Australian Government is serious about wanting to have a net zero public service by 2030, there’s going to have to be major procurement reform.

“Not only is the public sector a major purchaser of highly-carbon intensive goods (such as cement for infrastructure) but changing procurement practices would offer Australia a way to build the demand needed to support a green export ‘superpower’ trajectory in coming decades,” the report says.

The report outlines short and long-term steps that all governments can take to implement green procurement strategies, including setting targets and measuring baseline emissions in procurement.

Patchwork of green procurement policies causing confusion

The report says with government procurement accounting for over 17 per cent of GDP, there’s major potential to drive demand for low-emissions goods and services.

But is says the current patchwork of green procurement practices across different levels of government is causing confusion among both suppliers and government buyers, and is failing to incentivise providers to use more environmentally friendly materials.

CPD CEO Andrew Hudson says an integrated and coordinated nationwide procurement framework is needed to provide incentives for companies to use materials that are better for the environment.

“If the government changed procurement rules to require companies to use green materials in government contracts, it would drastically cut Australia’s emissions,” he says.

“It’s a huge lever to combat climate change that the government can easily pull.”

The government is one of the biggest employers, electricity consumers, vehicle fleet owners and purchasers of goods and services, and its procurement can radically increase uptake of low emission goods and services, Mr Hudson says.

“To achieve our net zero goals and become a renewable energy superpower it will be critical that all levels of government collaborate on ambitious procurement policies.”

Infrastructure procurement provides biggest opportunity

Infrastructure, which accounts for the lion’s share of spending by Australian governments, is identified as the biggest opportunity in green procurement.

Report author and CPD economic adviser Dr Mara Hammerle says analysis by the CPD shows that using recycled materials in road infrastructure could reduce costs of some components by up to 83 per cent and cut emissions by up to 98 per cent.

‘As an updated National Partnership Agreement on Land Transport Infrastructure Projects will soon be agreed between jurisdictions, the time is ripe for promoting the use of recycled materials in infrastructure projects,” she says.