Cabinet Office has developed and published a standard Carbon Reduction Contract Schedule which provides standard terms and conditions to support contract-specific decarbonisation objectives to be set and delivered and provides a framework to monitor and assess the Suppliers’ decarbonisation performance.

The Carbon Reduction Schedule supports PPN 06/21 which applies to major government contracts, framework agreements and contracts awarded under DPS with an anticipated value of £5m per year or more and requires suppliers to detail their commitment to achieving net zero.

Use of the Carbon Reduction Schedule is optional and should be used where it is relevant to the subject matter of the contract and where it is proportionate to do so. It can be included in relevant procurements or applied to existing contracts through a contract variation.

Below is a summary of some of the provisions of the Carbon Reduction Schedule:

1. The supplier is required to create a contract specific carbon footprint and identify any greenhouse gases (GHG) hotspots (i.e. aspects of delivery which are producing higher carbon GHG emissions in comparison to the rest of the contract). The Authority is encouraged to discuss this with the Supplier and mutually agree the timeline for the initial hotpot-assessment to be undertaken.
2. The Supplier is obliged to develop a GHG emissions reduction plan for the contract, and to set a reduction target which they should aim to meet every year. The target should be mutually agreed between Supplier and Authority, and any hotspots identified should be the prime focus (further areas can be included, taking into account the Supplier’s understanding and maturity). This plan is to be revised and delivered to the Authority annually.
3. The Authority has a right to request that the contract specific carbon footprint is assessed and verified by an independent party (this can only be requested once every two contract years).
4. There is a ‘Net Zero Modification’ paragraph which gives both parties an optional mechanism to suggest and agree to a contract modification to support the reduction of the carbon footprint. This mechanism can be used where new methodology or technology becomes available that could cut down on the GHG emissions associated with an identified GHG hotspot.
5. There is a ‘Remediation Plan’ section which is intended to hold the Supplier accountable for any failures to meet their Net Zero Contractual Commitments and to oblige them to inform the Authority as soon as they become aware that they might not meet their commitments. The Authority should support the Supplier in devising a remediation and improvement plan where this is the case.

Although optional, we expect to see the inclusion of the Carbon Reduction Schedule in model contracts and used more frequently going forwards so suppliers should be aware of its requirements and factor these into its public sector bids particularly for central government contracts.