Government Procurement Policy Supporting Green Building Materials Expanded

Recently, the Ministry of Finance, the Ministry of Housing and Urban–Rural Development, and the Ministry of Industry and Information Technology issued the “Notice on Further Expanding the Scope of Implementation of the Policy for Government Procurement to Support Green Building Materials and Enhance Building Quality” (hereinafter referred to as the “Notice”), clarifying that, building on the earlier implementation of the policy to support green building materials through government procurement and improve building quality, the scope of the policy will be further expanded.
He Daixin, head of the Fiscal Research Office at the Institute of Financial Strategy of the Chinese Academy of Social Sciences, stated that further expanding government procurement to support green building materials is both a result of the continuous improvement of government procurement systems and policies, and a substantive measure under a more proactive fiscal policy—through which the government actively leverages new investment and consumption.
The primary objective of this initiative is to promote green development in urban and rural construction by leveraging government procurement policies to actively encourage the adoption of green buildings and green building materials. It aims to vigorously advance new industrialized construction methods, such as prefabrication and smart technologies, build green buildings, establish long-term mechanisms to support the green and low-carbon transformation of the construction sector, and lead high-quality development in the building materials and construction industries. Ultimately, it seeks to deliver safe, comfortable, green, and smart homes while fostering livable, green, and low-carbon cities.
Regarding the scope of implementation, the Notice states that, effective January 1, 2025, a policy supporting green building materials through government procurement to enhance building quality will be implemented in 101 cities (including city districts), such as Chaoyang District in Beijing. Projects covered by this policy include government procurement projects for hospitals, schools, office buildings, mixed-use complexes, exhibition halls, convention centers, sports stadiums, affordable housing, and urban renewal projects, including those subject to the Tendering and Bidding Law. Cities implementing the policy are encouraged to extend its coverage to other government-invested projects.
The Notice clarifies that settlement of project payments shall be prioritized. For projects covered by the policy, the proportion of project payments settled should be increased, with progress payments accounting for no less than 80% of the value of work completed. Process-based settlement during construction is to be implemented: the contracting parties shall agree in the contract to divide the construction period into phases based on time or specific milestones, and to calculate, confirm, and pay for the value of work completed within each phase that is free of dispute. The process settlement documents, once confirmed by both parties, shall form part of the final settlement documentation; in principle, no further review will be conducted after project completion.
The Notice emphasizes strengthening the management of green building material procurement. For construction projects procured by the government, any building materials classified as “mandatory” in the “Government Procurement Requirements Standard for Green Buildings and Green Building Materials (2025 Edition)” must be fully sourced and used in compliance with the relevant standards. For materials designated as “optional” in the Requirements Standard, cities implementing the policy may, based on local conditions such as geographic location and industrial development, independently select cost-effective green building products; the proportion of selected product types should account for at least 40% of the total building material categories involved in the project.
“Specifically, the key tasks outlined in the Notice are very clear,” said He Daixin. He noted that the scope of implementation has been explicitly defined to include government procurement projects, and that more detailed provisions have been introduced regarding quality standards and category requirements for green building material procurement. Furthermore, prioritizing the settlement of project payments—particularly those involving government funds—will provide strong impetus for the effective implementation of relevant policies.
The Notice emphasizes the need to strengthen policy implementation. The Ministry of Finance, in collaboration with the Ministry of Housing and Urban–Rural Development and the Ministry of Industry and Information Technology, will further enhance policy guidance and promote advanced experiences and exemplary practices from selected cities. Provincial finance departments, working together with their counterparts in housing and urban–rural development and industry and information technology, should, based on local conditions, explore the establishment of incentive and evaluation mechanisms to ensure effective policy execution. All relevant regions and departments are urged to intensify efforts in interpreting policies, conducting public outreach and training, promptly addressing public concerns, mobilizing the enthusiasm of all stakeholders, and fostering a conducive working environment.
He Daixin stated that the implementation of the policy involves the work of relevant departments, including finance, industry and information technology, and urban–rural planning. Coordination and cooperation among these departments, as well as the sharing of information, are crucial. It is essential to integrate various measures, adopt a comprehensive approach, and ensure that all efforts work in concert.
“Overall, further expanding government procurement policies that support green building materials and enhance construction quality is of great significance,” said Lin Shuanglin, deputy director of the HSBC Institute of Financial Studies at Peking University and a professor at the Business School. He added that this initiative will help advance green development in urban and rural construction, create a better living environment, and improve the quality of life for the public.