Greening public procurement offers a key opportunity for governments to decarbonize economies. In Australia, public sector procurement accounts for over 17% of GDP. Not only is the public sector a major purchaser of highly-carbon intensive goods (e.g. 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.

Australian governments are beginning to make changes in this direction, with many Commonwealth and state-level processes underway – largely focused on scope 1 and 2 decarbonisation targets and electrification of vehicle fleets. However, there remains a need for more ambitious reform. The Australian government wants to have a net zero public service by 2030, and achieving this goal will require concerted action on procurement reform. The recommendations made in this report are part of what is needed to achieve this goal.

Key recommendations:

• Set clear and increasingly ambitious targets for the greening of public procurement, which includes reduction in scope 3 emissions and use of offsets.
• Address barriers to uptake of recycled materials, such as by increasing understanding and confidence by public procurers in these materials, supporting supply chain development, and ensuring that regulatory frameworks are fit-for-purpose.
• Enable industry to proactively suggest low-carbon solutions both during project design and the tender process.
• Support a multi-pronged approach to the decarbonisation of the Australian steel industry.
• Build capacity of public procurement staff and raise awareness of green procurement by businesses.