US abandons climate requirements for companies with public contracts

Decision comes as Europe says it will prioritise green procurement rules

The outgoing US government has abandoned its attempt to mobilise its multi-billion-dollar purchasing power to support its climate goals.

Amendments to federal procurement rules were withdrawn this week, due to the lack of time left on the clock for the Biden-Harris administration.

Introduced in 2022, the Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk amendment sought to require companies with government contracts worth more than $50m per year to disclose their Scope 1, 2 and 3 emissions.

Suppliers would also have been required to set decarbonisation targets validated by the Science Based Targets Initiative (SBTi).

Smaller contractors with contracts above $7.5m would have been required to disclose just their Scope 1 and 2 emissions.

The rule has raised concerns over its reliance on a non-government body, in SBTi.

The US Department of Defense, NASA and the General Services Administration formally withdrew the proposal on Monday, saying there was insufficient time left under the current administration to finalise it.

They also noted that a public consultation on the rules indicated “evolving practices and standards in industry, and an evolving domestic and international regulatory landscape.”

Meanwhile, the European Commission’s new industry chief, Stéphane Séjourné, plans to “overhaul” EU procurement rules to support the bloc’s green ambitions.

Reiterating his plans in an interview with Politico this month, he said the EU will “create decarbonised public procurement markets” to support industry, including “clauses that enable us to reinforce the rules favouring made-in-Europe products, for example, and a green label on industry”.