Lithuania’s way: employing public procurement as a tool to reach environmental goals

For more than 10 years, Mr. Kęstutis Kazulis has worked as the Head of the Public Procurement Department at the Kaunas Clinical Hospital, which was one of the first public entities to start green public procurements back in 2018. In 2021, he joined the Public
Procurement office as Principal Advisor where the main tasks include overseeing the Sustainable Procurement Department (which also acts as a sustainable public procurement competence centre in Lithuania) and the Electronic Procurement Department (which is
responsible for the national e-procurement system, specialists testing system and consultation platform). He represents the institution on sustainable public procurement matters at national and international levels.

In 2021, Lithuania launched a comprehensive reform of its public procurement system to reduce the country’s carbon footprint. What was the reason for this reform and what objectives did it seek to achieve?

In Lithuania, public procurements account for 12 percent of GDP. By embedding sustainability into its public procurement system, Lithuania aims to leverage its substantial public sector spending to make a positive environmental impact, while also driving long-term economic benefits through sustainable development. Firstly, the reform aims to promote the use of eco-friendly products and services, prioritizing procurement that has a lower environmental impact. This helps to generate demand for green technologies and sustainable practices while creating competition, which helps to reduce prices. Secondly, the reform seeks to incentivize innovation in the private sector, encouraging companies to develop and provide greener and more sustainable products. Thirdly, the reform supports the transition towards a circular economy, where products are reused, recycled, and repurposed to reduce waste and resource consumption. Fourthly, transformation is also driven by Lithuania’s alignment with broader European Union climate objectives, including the EU’s target of carbon neutrality by 2050.

What steps were taken to develop such an ambitious reform, and did it face any challenges with implementation across the public sector?

Talking about challenges, we have to start from the beginning. While the legal basis for GPP had been in place since 2011, unfortunately, it was not working as intended. So firstly, a revision of the existing legal framework was done in 2021:

1. The government decreed the milestones that were set to be reached.
2. The Ministry of Environment prepared the order in which the regulation was set what we understand as green public procurement.
3. The public procurement office created the tools to track the progress of GPP and started providing guidelines on how to implement GPP.

Secondly, a huge focus was on the creation of methodology tools.

Thirdly, capacity-building with limited resources was a challenge. Because SPP was quite a new topic in Lithuania’s procurement agenda, we had to find the right people to work in our office. More specifically, those who were and still are willing to learn fast, believe that GPP is the right way forward and are not afraid to be the leaders for this transition. 

One of the changes brought about by this reform was the creation of the ‘Competence Centre for Sustainable Procurement’. What is the scope of this office and what is its role? 

The Sustainable Procurement Department at the Public Procurement Office (PPO) acts as the Competence Centre for Sustainable Procurement in Lithuania. This Centre plays a crucial role in advancing sustainability in public procurement processes across the country. 

The scope of the Competence Centre includes:

• Guidance and Expertise: We serve as the primary hub for expertise in sustainable procurement, offering guidance, methodologies, and best practices for public buyers and suppliers nationwide. We ensure that public procurement aligns with green and socially responsible criteria.
• Methodology Development: We are responsible for developing and updating methodologies that assist public buyers in integrating sustainability criteria – such as considerations for the green economy, circular economy, and social impact – into their procurement processes.
• Training and Capacity Building: We provide training and capacity-building programs for public procurement professionals. These programs ensure that procurement officials understand and effectively implement sustainable procurement principles.
• Policy Support: We support policymakers by providing data and recommendations to improve sustainable procurement regulations and policies. We collaborate with stakeholders, including the Ministry of Environment, the Ministry of Social Security and Labor, the Innovation Agency, and other national organizations, to promote best practices in sustainability.

The role of the Competence Centre is to drive the adoption of sustainable procurement practices across Lithuania, ensuring that public procurement not only delivers value for money but also contributes to national sustainability goals. By providing expertise, monitoring tools, and capacity-building support, the Centre plays a vital role in fostering a culture of sustainability in public sector procurement.

Since the reform’s 2021 implementation until now, what progress, if any, has been made in the field of sustainable public procurement in Lithuania? How has the market reacted to the change?

The progress from 2021:

The value of green public procurement conducted in 2021–2024, in percent

• 2021: Green procurement 16.2%, Other procurement 83.8%
• 2022: Green procurement 60.2%, Other procurement 39.8%
• 2023: Green procurement 89.3%, Other procurement 10.7%
• 2024*: Green procurement 95.4%, Other procurement 4.6%

The number of green public procurement conducted in 2021–2024, in percent

• 2021: Green procurement 2.7%, Other procurement 97.3%
• 2022: Green procurement 12.6%, Other procurement 87.4%
• 2023: Green procurement 65.2%, Other procurement 34.8%
• 2024*: Green procurement 98.7%, Other procurement 1.3%

*Data based on 22/10/2024

Alongside the reform, the Government of Lithuania also published a long-term action plan. However, both the reform and the action plan run until 2025. Looking ahead, what comes next for GPP in Lithuania? Will new objectives for sustainable purchasing be set?

As everywhere, there are plenty of spaces for improvement. Together with the Ministry of Environment, we are constantly looking for ways to improve GPP: prevention of greenwashing, improving existing and further developing new criteria on GPP, circularity inclusion into public procurement, farm-to-fork strategy implementation, and more. 

This year, together with the World Bank and Open Contracting Partnership, we have started a project focused on creating the methodology for measuring the impact on the environment of GPP for some product groups. We have also submitted a project together with 22 partners in the Baltic Sea region on circularity and chemicals in Public Procurements. So looking beyond 2025, we have already started working on further development and improvement of GPP while improving the quality and understanding the impact.