Towards Circular Towns And Cities

INTERREG MED GREEN GROWTH COMMUNITYTowardscirculartownsandcitiesCircular Economy White Paper #2#2Promoting Green and SmartPublic Services withinMediterranean Municipalities tomove towards a Circular EconomySeptember 2019

INTERREG MED GREEN GROWTH COMMUNITYTowardscirculartownsandcitiesPromoting Green andSmart Public Services withinMediterranean Municipalitiesto move towards aCircular EconomyAbout the CircularEconomy White PapersThis White Paper is part of a series of thematic CircularEconomy White Papers presenting the contributions ofthe Interreg MED Green Growth community and theirefforts in transitioning towards a circular economy, inthe areas of 1) Resource Efficiency, 2) Green and SmartPublic Services, 3) Waste Prevention and Managementand 4) Competitiveness and Innovation.A circular economy is‘where the value of products,materials and resourcesis maintained in theeconomy for as longas possible, and thegeneration ofwaste minimised’.European Commission 20151The thematic White Papers are complemented with atransversal White Paper and accompanied by a set ofPolicy Recommendations and Legal Recommendationsin the same thematic areas. The elaboration of theWhite Papers was led and developed by the SYNGGIproject based on contributions from modular projectsof the Interreg MED Green Growth Community2, through dedicated Thematic Working Groups on the fourthematic areas.Green and Smart Public Servicesand the Circular EconomyWith the EU Circular Economy Action Plan3 adoptedin 2015, the European Commission sets out actionswhich will help to ‘close the loop’ of product lifecycles,keeping resources in the economy while retaining thevalue of these resources. This will contribute towards asustainable, low carbon, resource efficient and com-

Circular Economy White Paper #2 03petitive economy. In this transition towards a circulareconomy, greening public procurement – the buying ofworks, goods or services by public bodies – is regarded as a key driver, as it accounts for a significant share of consumption in the European Union, worth over14% of the EU GDP (equating to over EUR 1.9 trillion).Among the EU’s actions for integrating circular economy principles in green public procurement (GPP) arethose related to emphasizing circular economy aspectsin the EU GPP criteria and supporting a greater uptakeof GPP among European public bodies and by EU institutions themselves.Only a few Member States have so far put in placepolicies for environmentally responsible public procurement. Furthermore, there is still an excessive use ofthe lowest price as an award criterion6. This does notalways lead to the best value-to-cost ratio, let alonegreater environmental sustainability. The EuropeanCommission promotes the principle of the Most Economically Advantageous Tender (MEAT), into which qualitycriteria can be integrated. The use of this principle inthe EU countries of the Mediterranean region varieswidely (see Figure 1).Green Public Procurementis “a process wherebypublic authorities seekto procure goods,services and works with areduced environmentalimpact throughout their lifecycle when compared togoods, services and workswith the sameprimary function that wouldotherwise be procured”.5. European Commission (2008). Public procurement for abetter environment.6. European Commission (2017). European SemesterThematic Factsheet - Public Procurement.7. European Commission (2017). European SemesterEuropean Commission 20085THE USE OF THE MEAT CRITERIA FOR EVALUATING TENDERS(2006-2016) 730%25%20%15%10%5%0%ATFigure 1BEBGCYCZDEDKEEESFIFRGR HR HUIEITLTLULVMT NLPLPTROSESISKUK EU28Source: European Commission (2017). European Semester Thematic Factsheet - Public Procurement.

INTERREG MED GREEN GROWTH COMMUNITYTo move away from the current linear “Take-Make-Waste” economic model and to procure in accordance withcriteria of sustainability and circularity requires consideration of the long-term impacts of each purchase,including the costs of services and products over theirentire life cycle. Circular public procurement emphasizes the role that public authorities can play in supporting the transition towards a circular economy8.“Circular procurementcan be defined as the processby which public authoritiespurchase works, goods orservices that seek to contributeto closed energy andmaterial loops withinsupply chains, whilstemphasizing, and in the bestcase avoiding, negativeenvironmental impactsand waste creationacross their wholelife-cycle”.The Interreg MED GreenGrowth Community and itscontribution to promoting greenand smart public services fora circular economyThe objective of the Interreg MED Green Growth community is to promote sustainable development in theMediterranean area, based on sound management ofthe natural resources and by fostering innovation through an integrated and territorially based cooperationapproach. Several projects that form part of the Interreg MED Green Growth community strongly contributeto promoting green and smart public services:GRASPINNO (Transnational model, strategies anddecision support for innovative clusters and businessnetworks towards green growth, focusing on greene-procurement in EE/RES10 for energy refurbishment ofpublic buildings) provides innovative green procurementsolutions for energy savings/efficient refurbishment ofpublic buildings, focusing on smart cities and communities. Its goals are to (a) improve the capacity of PublicAuthorities to manage the energy efficiency of buildings, moving towards near zero energy buildings; and(b) strengthen SMEs to enter the green energy market.European Commission 20179ESMARTCITY (Enabling Smarter City in the MED Areathrough Networking) aims at improving the innovationcapacity of Mediterranean cities by creating innovationecosystems and applying the Smart City concept (theuse of digital and energy saving technologies to supply better services to citizen with less impact on theenvironment). The project tests solutions in the field ofintelligent urban districts, energy efficiency of buildingsand smarter public lighting.At the same time, green or circular public procurementcan only be effective if there are providers of productsand services on the supply side that can comply withthe criteria set in tender processes. Therefore, thecapacity of SMEs to innovate and come up with greenand circular products and services is key (see alsoCircular Economy White Paper No. 4 on Innovation andCompetitiveness).GREEN MIND (GREEN and smart Mobility INDustryinnovation) has the objective to strengthen the transnational activities of clusters and agencies to supportSMEs in exploiting the market opportunities of theraising demand for green and smart mobility productsand services. The project tests new market intelligence, public funding screening and B2B matchmakingservices for SMEs.8. European Commission (2017). Public Procurement for aCircular Economy. Good Practice and guidance.9. European Commission (2017). Public Procurement for aCircular Economy. Good Practice and guidance.10. Energy Efficiency and Renewable Energy Sources.

Circular Economy White Paper #2 05Challenges and opportunitiesaddressed by the Interreg MEDGreen Growth Community projectsThe overall challenge addressed by the Interreg MEDGreen Growth community projects is that public procurement and the provision of public services across theMediterranean do not systematically consider aspects ofcircularity and sustainability.On the procurement side, green public procurement principles are not applied widely, and often economic and environmental criteria are perceived to be conflicting factors.The best choice from an environmental perspective doesnot always coincide with the best choice from an economic perspective if the costs of products and services arenot calculated over the entire life cycle.On the supply side, service providers – particularly SMEs– have a limited capacity to offer products and servicesthat comply with criteria of sustainability and circularity.Overall, the innovation level in the Mediterranean regionis still lagging behind the EU average (excluding Italy andSlovenia, which ranked fifth and seventh, respectively, inthe European country ranking on Circular Economy), andMediterranean SMEs do not keep pace in eco-innovationactivities, as green and smart industry clusters are fewerin number and smaller in size. .Indicators regarding the number of patents, considering investments and jobs in circular economy sectorsare those that are most directly aligned with the overallperformance level of a country in the circular economyranking11.The specific challenges tackled by the projects are: Limited integration between environmental and economic criteria and limited application of the life cycle costmethodology in green public procurement, where the useof a scoring system for the most economically advantageous tender (MEAT) does not always lead to a lower lifecycle cost (LCC) Public buildings account for the second largest energyconsuming sector in municipalities at European level,hence energy refurbishment of these buildings is considered to be a crucial first step to start improving the buildingstock. Public authorities require enhanced innovation capacities to engage in electronic green public procurement,11. According to the study, and as shown on the map, “Germany, the U.K. and France respectively topped the ranking— with robust recycling systems and high levels of innovationin circular economy sectors. Bigger countries also tend to havehigher circular economy scores, due in part to the fact thatthey have larger economies with more private investment andpatents.”CIRCULARECONOMY RANKINGBY “POLITICO” nd private actors related to eco-innovation and greenenergy, which could provide solutions in green energyrefurbishment of public buildings, need enhanced capacities to participate in green e-tenders. Cities need to allow new smart and green services overthe existing city infrastructure. This is critical for bothensuring the proper maintenance and updating of existinginfrastructure as well as enhancing the city as innovation ecosystem breaking the silos between applicationdomains and providing opportunities for new servicedevelopment based on the analysis of acquired big datarepresenting a new asset and on new service providers. Vendor lock-in for cities (i.e. public authorities becomingdependent on a particular vendor of a product or service,only able to change the vendor at significant costs) andcity lock-in for vendors (i.e. the vendor becoming dependent on a particular city for the provision of its product orservice, unable to provide the same service to anothercity). A lack of awareness among public authorities and SMEsregarding the opportunities for smart mobility solutions. Mobility data is lacking at the city level, due to datagaps, a reluctance towards data sharing and the highcosts for data aggregation and management; differentapproaches need to be explored to enable data sharingand to cut down cost for cities.12. Politico (2018). Ranking how EU countries do with thecircular economy