Food sector among winners of a ‘Buy European’ approach, says study

6 months ago 23

Including local-content and sustainability criteria in public procurement of food would be compatible with WTO rules and would also bring significant climate and economic benefits, according to a report published on Wednesday (15 May) by consultancy Carbone4.

The report’s authors gathered data to call for the introduction of a “Buy European and Sustainable Act”, which would regulate how public authorities across the bloc award public procurement contracts by introducing environmental and EU origin criteria.

“[Public procurement] cannot be overlooked by Europe’s policymakers if they are serious about meeting climate targets and (…) modernising sectors vital to the economies of member states, including struggling farmers,” Antoine Crépel, coordinator of the study, said in a press release on Wednesday.

The authors looked at the public procurement of heavy materials, vehicles, buildings, and food, and found the greatest potential carbon savings in the latter.

According to the report, supported by the European Climate Foundation, the implementation of such a law would lead to an estimated 23% annual reduction in the carbon footprint of the EU public purchases of food.

A European and sustainability scheme, the document added, would create 201,000 new jobs and trigger investments of 54 billion euro in agriculture, food, and catering services.

These conclusions come a week after the World Bank called for increased investment in wealthy economies to cut agrifood emissions by shifting subsidies from emissions-intensive products such as red meat and dairy products to low-emissions foods such as fruit and vegetables.

More plant-based and organic products

The report said the EU should aim to source 98% of procured food within the bloc but also found that it is not the inclusion of local criteria but sustainability that would make the biggest difference.

According to the authors, an average of 93% of the food procured in the EU is already ‘local’, as it comes from member states.

To achieve results in reducing emissions in the food and catering sector, the authors suggested reducing by 20% the volume of animal products procured and having 100% organic food or food grown using agroecological practices – such as crop diversification, water conservation, and harvesting.

Complying with WTO rules

According to a legal analysis accompanying the report and supported by Europe Jacques Delors think tank, the scheme might be compatible with the World Trade Organisation’s (WTO) non-discrimination principle, which allows for an exemption for public procurement.

“The EU has not yet made full use of this tool to increase green demand, support domestic producers, foster innovation in low-carbon transition solutions (…)”, said the legal analysis, written by the lawyer Clémentine Baldon.

However, the scope of the public procurement exemption is limited.

The EU is part of the WTO’s Plurilateral Agreement on Government Procurement (GPA), which commits it to opening up its public procurement to other GPA parties such as the United States, Canada, and Australia.

For these countries, the EU can only introduce sustainability requirements – a recurring practice in the bloc, according to John Clarke, former EU top agricultural trade negotiator and one of the original negotiators of the GPA.

“It is very understandable that policymakers want to give support to EU producers, the GPA gives some room to do that,” Clarke told Euractiv, pointing out that the bloc can still implement “buy European” measures against countries that are not parties to the GPA, such as China and Brazil.

“Whether to do so makes economic sense or is the best use of taxpayers’ money is a separate question,” he added.

In a policy paper published in February 2023, the Bruegel think thank highlighted the “protectionist elements” in the US’s 2022 Inflation Reduction Act (IRA), including local-content requirements prohibited under WTO rules. The paper indicated a possible EU way via introducing sustainability criteria without any form of mention to origin.

“The EU should use [green public procurement] more strategically to push European industry to develop green technologies and products (…) leading to a spillover effect that will increase demand for greener goods and services,” the paper said.

[Edited by Angelo Di Mambro/Zoran Radosavljevic]