'Use public procurement to boost renewables' - Supply Management

‘Use public procurement to boost renewables’

Countries should turn to public procurement to boost green technology markets in the face of stagnating global investment in renewables, a global energy agency has said.

The International Energy Agency (IEA) said governments should stimulate investment using public procurement in markets such as carbon capture, usage and storage (CCUS), CO2 utilisation and low-carbon products, following the lead of the Netherlands, Canada and India.

It said that although avoiding carbon emissions by these methods can be expensive, governments could lessen the blow by investing to increase demand for materials that have lower carbon footprints.

In the World Energy Investment 2018 report, the IEA described public procurement rules in the Netherlands and Canada that favour materials with low-carbon footprints for building projects. 

This, it said, could “make the difference” for companies that convert CO2 into building materials, and ultimately help establish “significant and sustainable” markets worldwide.

There was a similar outlook for the electric car industry, which enjoys purchase incentives and subsidies from governments totalling $10bn worldwide, equivalent to nearly a quarter of total spending. 

Electric car subsidies are set to rise fivefold to $50bn by 2021, the IEA said, heaping "further pressure" on public purses. To rein in these costs, the report advised governments to follow India, which uses a bulk public procurement plan to minimise prices and kickstart the production and sale of electric cars.

The recommendations came against a backdrop of falling global investment in renewables, which declined by 7% to $318bn (£240bn) last year, with the drop set to continue in 2018. 

Meanwhile, the share of fossil fuels in energy supply investment rose for the first time since 2014, with a 4% increase in oil and gas spending to $450bn.

“Such a decline in global investment for renewables and energy efficiency combined is worrying,” said Dr Fatih Birol, the IEA’s executive director. “This could threaten the expansion of clean energy needed to meet energy security, climate and clean-air goals,” he said.

“While we would need this investment to go up rapidly, it is disappointing to find that it might be falling this year,” he added.

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