Important Notice for Bidders and Suppliers. New Procurement Policy Changes Under the Climate Change Act

Bidders and Suppliers Be Prepared!

The newly enacted Climate Change Act, effective 17 March 2025, requires all government entities to align their procurement policies with climate goals. This means suppliers and bidders must adapt to new Green Procurement and Environmental, Social, and Governance (ESG) standards.

Under the Act, government entities must prioritise goods and services that reduce greenhouse gas emissions, enhance climate resilience, and support the transition to a low-carbon economy.

Once organs of state update their policies in line with the Act, suppliers may need to:

- Demonstrate compliance with carbon budgets and emissions targets.

- Meet green specifications and evaluation criteria in tenders.

- Show efforts to reduce carbon footprints in operations and supply chains.

The Act also allows organs of state to require suppliers to provide data on the climate impact of their goods and services when awarded government contracts.

Additionally, financial incentives such as subsidies and grants may be introduced to encourage the supply of low-carbon products and services.

The Ministry may also require any organ of state to submit procurement policies, carbon emission thresholds, and related data. Failure to comply may result in:

- Fines of up to R5 million or imprisonment of up to five years for a first offence.

- Fines of up to R10 million or imprisonment of up to 10 years for repeat offences.

To remain competitive and compliant, bidders and suppliers should review their carbon emissions and sustainability practices, align with green procurement standards, and be prepared to submit climate-related data when required.

The Climate Change Act of 2024 marks a major shift in government procurement, placing a stronger emphasis on sustainability, emissions reduction, and climate resilience.

Also, the new Regulations for the Public Procurement Act 2024 will soon be released and it will also demand major changes to be implemented for bidders and suppliers alike.

Stay informed and adjust your business practices to meet these new legal requirements.

For assistance on any tender issue or if your team requires training on how to submit winning bids, contact Gerrit Davids, Lead Advisor at TaranisCo Advisory:

📞 +27 82 496 1657  | 📧 gerrit@taranisco.co.za

TaranisCo Advisory Ó 2025