Introduced by the UK government in June 2021, Procurement Policy Note 06/21 (PPN 06/21) mandates that all suppliers bidding for central government contracts over £5 million annually must submit a Carbon Reduction Plan (CRP). This policy aligns with the UK’s target to achieve Net Zero by 2050 and applies specifically to NHS suppliers as part of NHS England’s Greener NHS strategy. Understanding PPN 06/21 Requirements for NHS suppliers is vital for businesses seeking to secure NHS contracts.
PPN 06/21 is a procurement policy note issued by the Cabinet Office that outlines the need for suppliers to demonstrate their commitment to reducing greenhouse gas emissions through a formal Carbon Reduction Plan. The guidance applies to:
The policy took effect on September 30th, 2021. Suppliers must provide Carbon Reduction Plans (CRPs) with their tender submissions, showing how they intend to meet Net Zero by 2050. They must also disclose their current carbon footprint and the measures in place to reduce emissions. The policy wants to encourage organisations to reduce their carbon footprint rather than exclude them from public sector contracts. This helps the government tackle its Scope 3 emissions as the PPN 06/21 mandates five Scope 3 emission sources.
Read More: PPN 06/21: What and Why
Timeline of PPN 06/21 for NHS Suppliers
April 2023: For all new contracts above £5 million per annum, suppliers must publish a Carbon Reduction Plan covering UK Scope 1 and 2 emissions and a subset of Scope 3 emissions.
April 2024: The CRP requirement extends to all new procurements regardless of contract value. This marks a significant expansion of the policy's reach.
April 2027: All suppliers will be required to publicly report targets and emissions and publish a Carbon Reduction Plan for their global emissions aligned to the NHS net zero target, covering all Scope 1, 2 and 3 emissions.
April 2028: New requirements will be introduced for carbon foot printing of individual products supplied to the NHS.
April 2030: Suppliers must demonstrate progress through published reports and continued carbon emissions reporting to qualify for NHS contracts. This represents the culmination of the initial phase of the roadmap.
Suppliers who miss these deadlines might lose their chance at NHS contracts, so early preparation makes all the difference.
For NHS suppliers, PPN 06/21 forms a critical component of the NHS’s ambition to become the world’s first Net Zero national health service. As of April 2023, any supplier bidding for contracts over £5 million must comply with PPN 06/21 by submitting a CRP. The government has provided a standardised CRP template to ensure consistency. It includes sections for emissions data, reduction measures and corporate commitments. The NHS recommends using the template but adapting it with sector-specific considerations.
Beginning April 2024, the NHS has implemented a proportionate two-tiered approach based on contract value to ensure all suppliers advance along the net zero supplier roadmap:
Tier 1: Full Carbon Reduction Plan is required for:
Tier 2: Net Zero Commitment is required for:
This tiered approach ensures that requirements are extended in a proportionate manner, allowing smaller suppliers to take early steps toward future roadmap milestones while still contributing to the NHS's sustainability goals. The policy applies to all types of procurement, including goods, works, services, pharmaceuticals and healthcare services purchased by NHS organisations. Additionally, this requirement operates alongside the minimum 10% weighting on net zero and social value in NHS procurements that has been in place since April 2022.
A well-laid-out Carbon Reduction Plan (CRP) needs accurate emissions data and clear reduction pathways. Suppliers must collate and process data from their baseline emissions and include a specific reduction plan that’s trackable. Mandatory components of an effective carbon reduction plan include:
Read More: Carbon Reduction Plan
Some challenges frequently encountered by organisations with regards to PPN 06/21 compliance include:
Accuracy in Emissions Calculation: Some suppliers struggle with gathering the necessary data and calculating them in line with NHS standards.
Data Availability: It’s important to ensure that data gathered covers all the required basis and adheres to internationally recognised methodologies such as ISO 14064-1 and GHG Protocol. For example, many companies struggle to collect data for employees’ commuting, the data collection requires justified methodologies and reasonable assumptions to account for limitations.
Strategy Development: Not all businesses are equipped with the right resources to establish clear carbon reduction strategies. At Tunley Environmental, our expert sustainability scientists provide tailored decarbonisation roadmaps aligned with NHS targets.
Keeping up with Policy Changes: Given the long-term roadmap of the NHS’s decarbonisation goals, businesses subject to PPN 06/21 must ensure they are attuned to any changes or developments in the policy.
PPN 06/21 marks a significant shift in NHS procurement practises, establishing clear pathways for suppliers to demonstrate their environmental commitments. Suppliers must now choose between full Carbon Reduction Plans for contracts above £5 million per annum or Net Zero Commitments for smaller contracts, ensuring proportionate requirements across different business sizes. Suppliers who start early, maintain accurate records and follow technical specifications precisely stand the best chance of success.