COP26: what we need to achieve at the climate conference

The Covid-19 pandemic brought humanity’s vulnerability into sharp focus, emphasising the importance of international collaboration. Now, as extreme weather events wreak havoc around the world, the climate emergency is beginning to receive global recognition. This could spur real change at the COP26 conference, which will be held in Glasgow this November.

The summit is likely to be shaped by a new report from the Intergovernmental Panel on Climate Change (IPCC). The report warns that there is now a very small window to reduce emissions before exceeding the emissions limit of 1.5°C, as set out in the Paris Agreement. With this in mind, the gravity of COP26 cannot be overstated.

We look at the expected objectives for COP26, and how these crucial policy shifts could impact businesses across the UK.

Ambitious targets for 2030

So far, the focus has been on achieving net zero by 2050. But countries are now being asked to come forward with ambitious emissions reductions targets for 2030.

According to the new IPCC report, global CO2 emissions need to decrease by about 45% below 2010 levels by 2030. Otherwise, if they continue to rise at the current rate, global temperatures are projected to increase by more than 1.5°C between 2030 and 2052.

The UK has a significant part to play in this effort. Despite making up less than 1% of the global population, the UK is historically the fifth-largest contributor of carbon emissions in the atmosphere.

For the private sector, this will most likely result in a greater emphasis on science-based targets. Science-based targets aim to reduce emissions, through concrete, corporate objectives. These shorter-term goalposts are designed to track progress for businesses, providing greater transparency on the road to net zero and beyond.

Prioritising adaptation

The IPCC report warns that even with global decarbonisation efforts, it will take decades for the planet to recover. This doesn’t mean that achieving net zero by 2050 and staying within the 1.5°C limit wouldn’t result in immediate benefits (such as improved air quality). But it could take twenty to thirty years for global temperatures to stabilise.

Critically, some of the damage could be irreversible. According to the report, numerous climate-related weather events will continue to cause disruption for centuries to come. This means that adaptation will be just as important as mitigation efforts.

Adaptation methods involve adjustments to ecological, social or economic systems in anticipation of climate change. These can range from building flood defences and early warning systems to changes in government policy and redesigning communication systems.

These methods can coincide with mitigation methods, which focus on reducing emissions.

Given the current state of play, it makes sense that adaptation and resilience are principle themes at the upcoming COP26 event. These are key considerations for large businesses hoping to thrive in the future.

Reforestation and conservation

UK Prime Minister Boris Johnson has promised new domestic pledges and plans to garner international commitments on “coal, cars, cash and trees”.

He said: “We want COP26, the UN great summit, to commit to restoring nature and habitat and ending the massacre of the forests, because trees are among our best natural defences against climate change. To be net-zero for carbon you must be net-positive for trees and by 2030 we want to be planting far more trees across the world than we are losing.”

The UK has faced criticism in the past for having the lowest levels of tree cover, compared to its European neighbours. Forests currently cover just 13% of the country. To reach its net zero target, the Committee on Climate Change has said that tree cover in the UK needs to rise to 17% by 2050.

Mobilising green finance

According to a new analysis from WWF, the UK government’s committed spending is currently well below the required rates to meet its legally binding net-zero emissions target.

Financing green initiatives is essential to combatting climate change, and mobilising green finance is a key objective for COP26.

Achieving our climate goals will require public finance for the development of infrastructure and private finance for innovation and technology. In this transition every company, bank, financial firm and investor will be expected not only to follow, but to lead change.

How can EIC help your business to prepare?

We can provide a bespoke, adaptable roadmap to net zero for your organisation – ensuring carbon compliance and long-term financial stability along the way. Our comprehensive energy and carbon services help guide organisations towards a more sustainable future.

Our goal is to help companies navigate the transition to a low carbon economy. We recognise that while policy decisions drive decarbonisation, every business has a part to play.

To learn more about our net zero and sustainability services, contact us at EIC today.

Football clubs and the path to net zero

With COP26 on the horizon, as well as the release of an alarming new report from the IPCC, the UK’s net zero target has become more urgent. This will mean more organisations will be expected to join in and stay ahead of changing policy. This is not lost on Premier League football clubs, many of whom have already committed to net zero targets. Some have even succeeded in achieving radical emission reductions.

There are numerous advantages to becoming a net zero football club. It provides a significant reputational boost and has the potential to cut long-term costs. It is clear that carbon reduction is quickly becoming a mandatory part of any business strategy.

We look at what it means to become a net zero football club and why it matters.

UN Sports for Climate Action Framework

The UN Sports for Climate Action Framework aims to support and guide sports organisations towards a more sustainable future. Similar to science-based targets, this is a voluntary framework setting out identifiable objectives for those looking to display climate leadership.

The framework sets out five principles for signatories:

  1. Promote environmental responsibility.
  2. Reduce overall climate impact.
  3. Educate for climate action.
  4. Promote sustainable consumption.
  5. Advocate for climate action.

The Premier League sustainability table

These principles have been reflected in a table published by BBC Sport and the Sport Positive Summit ranking Premier League clubs. In 2020, football teams at the top of this sustainability table included Tottenham Hotspur, Arsenal and Manchester United, amongst others.

Points were awarded for:

  • Clean energy (2 points)
  • Energy efficiency (2 points)
  • Sustainable transport (2 points)
  • Single-use plastic reduction or removal (2 points)
  • Waste management (2 points)
  • Water efficiency (2 points)
  • Plant-based or low-carbon food options (3 points)
  • Communications & engagement (3 points)

One bonus point was available for each of the following:

  • The club actively engages fans towards positive behavioural change that reduces environmental impact in their own lives.
  • The club is a signatory to the UN Sports for Climate Action Framework.
  • The club tracks and reports on the percentage of fans taking different modes of transport to games.

This criteria demonstrates the level of action football clubs are expected to take beyond simply offsetting their carbon emissions. By including energy, waste and water management as well as social engagement and scope 3 emissions reporting, these principles promote real change.

Where to start

Once you have pledged your commitment to net zero, it is important to spread the word. This can be a valuable boost to your reputation, but it also helps to get staff, suppliers and fans involved in making your business more sustainable.

The next step is to calculate your carbon footprint and map a path to net zero. This is where EIC comes in.

Our carbon team has worked closely with Premier League football clubs, helping them to calculate their emissions, mapping a route to net zero, and supporting them on their journey.

Our extensive list of sustainable services includes:

  • Sub-metering and monitoring
  • Carbon footprinting
  • Carbon compliance and management
  • Energy data insights and support
  • Support for efficiency measures
  • Onsite generation guidance
  • Green procurement
  • Energy and carbon reporting
  • Waste management
  • Sustainable water solutions
  • Support with installing EV infrastructure

Why become a net zero football club?

For decades, the climate emergency has been met with apathy and reluctance. Now, there is real momentum to take action before it is too late. Unfortunately, some organisations are continuing to do the bare minimum in an effort to appear greener without making significant changes. But this ‘greenwashing’ will not support their transition to a net zero economy. The businesses that will thrive are those that embrace efficiency, reducing consumption and waste from every corner of their organisation.

By doing this, not only will football clubs become part of a net zero future – they can become leaders too.

The Smart Export Guarantee (SEG) explained

The Smart Export Guarantee (SEG) came into effect on 1st January 2020, replacing the Feed-in Tariff (FiT). These schemes offered payments to businesses with installed onsite generation, a vital part of the UK’s journey to net zero.

Onsite generation can offer businesses various benefits, including self-sufficiency and environmental sustainability – and as the technology becomes less expensive and more efficient, the advantages will only increase. While these green solutions are not suitable for every business, they are becoming more prevalent in this time of economic recovery.

Here are some FAQs regarding the new scheme and how it works:

What is the Smart Export Guarantee (SEG)?

The SEG offers payment to small-scale renewable energy generators for excess electricity that is exported to the National Grid. To do this, suppliers with at least 150,000 domestic customers will be required to provide a minimum of one tariff offer to small-scale low-carbon generators.

Do I need to apply for the Smart Export Guarantee?

If you are a small-scale energy generator with either solar PV, wind, CHP, Hydro, or Anaerobic digestion, installed in England, Scotland or Wales with a capacity up to 5MW (or up to 50kW for micro-CHP), you may fit the criteria for the SEG.

For next steps and more info download our SEG Guide

What if I already get the Feed-in Tariff (FiT)?

If you signed up for FiT before the 31 March 2019 deadline, your payments will continue until your contract runs out. The SEG is mostly for companies or households with new renewable energy installations, or for those who missed the FiT deadline.

There is no FiT subsidy for newly installed renewable energy technologies after this date. Backdated applications will also not be accepted.

What is the difference between SEG and FiT?

Whilst the SEG is replacing the Feed-in Tariff, there are differences between the two schemes. The Feed-in Tariff included both export and generation tariffs, but the SEG only provides the former. In other words, with the SEG you will only receive tariffs for the renewable energy you don’t use. This means that customers may not see the same financial benefit for the renewable energy they are generating as solar panel owners initially did with FiT. (Tariffs will vary across regions depending on network requirements.)

There is also a scheme for renewable heat technologies for both domestic and non-domestic purposes, known as the RHI and non-domestic RHI. This government scheme provides financial incentives for the installation of renewable heat technologies. Eligible technologies include biomass heat, solar thermal and heat pumps.

How do I know if on-site generation is right for my business?

On-site generation can often provide energy security: a worthwhile commodity in a volatile market. It can also help businesses avoid non-commodity costs, which can make up almost 60% of your energy bills.

At EIC, we already support our clients with initiatives that incentivise clean energy use, assisting clients with navigating the transition to a net zero landscape. We can help guide you towards the most efficient and cost-effective energy management plan. This can mean exploring on-site generation options, as well as other sustainable solutions that can reduce your carbon emissions and energy costs.

For businesses that have set or plan on committing to a net zero target, EIC would be happy to engage with you. Our carbon team works with businesses to put together an adaptable and bespoke roadmap, outlining the sustainable steps required to reduce your carbon footprint. Along the way, we will ensure you stay compliant with changing legislation, allowing you to make the most of schemes such as the SEG.

To understand more about our energy and carbon services contact us at EIC.

A circular economy – is your business ready to benefit?

The rise in extreme weather events around the world has lit a fire under the global climate movement (quite literally). This is especially true in the UK, where COP26 will take place this October. For this reason, many consider a circular economy to be the best approach in navigating a post-Covid economic recovery.

A circular economy is based on resource efficiency and would help propel the UK’s path towards net zero. Fortunately, a research programme initiating the country’s shift to a circular economy launched in May. The initiative, encompassing 34 universities and 200 industry partners, aims to ease the transition away from taking, making and disposing.

We take a look at what the circular economy means and how UK businesses stand to gain from this approach.

What is a circular economy?

A circular economy is designed to make resources as sustainable and efficient as possible. This means reducing, reusing and recycling resources as much as possible to extend their value and reduce waste.

The main principles behind a circular economy are:

  • Design out waste and pollution.
  • Keep products and materials in use.
  • Regenerate natural systems.

While it is clear that a circular economy can benefit the UK from an environmental perspective, the advantages of this transformation aren’t just climate-related: UK businesses stand to gain as well.

A 2015 study has shown that a circular economic approach could offer costs savings of over half a billion euros by 2030 in Europe alone. It stands to reason that this approach would also benefit those businesses seeking to make financial savings through increased efficiency.

Why should we accelerate our transition to a circular economy?

Each year, Earth Overshoot Day creeps progressively closer. This is an annual milestone, marking when we have used up the natural resources that can be regenerated in a single year. In 2019 and 2021 it fell on 29 July, the earliest date on record.

This means that until the end of the year, the global economy is operating in what is being called an “ecological deficit”. Humanity currently uses 74% more resources than the planet is able to regenerate each year – the equivalent of 1.7 Earths.

In this global culture of waste and inefficiency, the UK is far from unimpeachable – our own national Overshoot Day fell on 19 May this year. The need to transition to a circular economy is becoming more urgent.

How can I prepare my business for a circular economy?

Think about which resources are critical to your business and how you could use them more efficiently. Here are a few areas to consider:

Utilities & Energy

Utilities are usually an excellent starting point, as most businesses need electricity, water and heating. Investing in metering and sub-metering technology across your sites means that you can track these resources and identify areas of waste. A study from the non-profit Club of Rome concluded that installation services for these types of improvements would be central to realising a circular economy in Europe.

Onsite generation may also be a pragmatic energy option for your business. This sustainable solution offers self-sufficiency and energy stability. Onsite generation can play a significant role on the road to net zero. Not to mention, you can avoid rising non-commodity costs which make up a large portion of energy bills.

Waste Management

Waste management is another easy and pragmatic step for businesses looking to adopt a circular approach. The UK generated 222.2 million tonnes of total waste in 2018. Of that, commercial and industrial waste accounted for almost a fifth (19%). This demonstrates the pressing responsibility on these sectors to adopt responsible waste management practices.

Sustainable Design

In November 2020, the UK government invested £22.5m into five new circular research centres. At the heart of this new funding scheme was the development of sustainable design and disposal principles. These centres will explore and improve the processes of several heavily polluting sectors in the UK.

Sectors under the microscope include textiles, metals, construction, chemical production and electronics waste. Construction alone produces a shocking 154m tonnes of mineral waste per year – enough to fill 30,000 Olympic swimming pools.

How can EIC help?

At EIC, we support the transition to a circular economy by leading our clients towards efficiency and sustainability. Our comprehensive services cover metering and monitoring, waste management, carbon compliance, and even guidance regarding onsite generation.

Whether you are looking to take the first step in becoming more circular, or revolutionising your business to be as sustainable as possible, EIC can help.

To learn more about how we can help you accelerate the shift to a circular economy, contact us at EIC today.

What the new IPCC report means for big energy users

Authored by a group of 234 scientists from 66 countries, the latest IPCC report warns that we have very little time to deliver the emission cuts we need to prevent the worst impacts of climate change.

This comes just months before the COP26 climate conference is set to take place in Glasgow. Consequently, the report is predicted to play a significant role in shaping future policy – much like the IPCC’s last report influenced the Paris Agreement.

This could mean radical change for energy intensive industries over the next decade. Given the urgency indicated in the report, businesses should prepare for this sooner rather than later.

Expect a rise in climate-related risk factors

In the UK’s 2020 Roadmap and Interim report, the government announced its intention to make the TCFD-aligned disclosures mandatory across the economy. This will mean accounting for any business risks related to global warming, including threats posed by extreme weather events.

Over the past decade, we have seen a rise in destructive wildfires, devastating heat waves and flooding on a massive scale. This is already impacting business supply chains, transportation and employee health and safety. In this new report, the IPCC draws a definitive link between global warming and the frequency and intensity of these events. This means that as temperatures continue to climb, these calamities will only worsen, putting businesses at further risk.

The report also indicates that even with the required emission reductions, it could take two to three decades for global temperatures to stabilize. This means that, at least for the moment, extreme weather events must be planned for in the long term.

That the disclosure of these climate-related risks will become mandatory for UK businesses is indisputable. But, it is just as important to mitigate these risks as much as possible now.

Net zero targets will become more important than ever

The IPCC report has been referred to as a “wake-up call”, and this could mean a radical overhaul of energy intensive industries. As the UK government ramps up its decarbonisation efforts, large companies will be expected to follow suit. This means setting ambitious net zero targets.

For big energy users, the route to net zero will not be straightforward. Yet, there are many advantages to becoming a net zero or carbon negative organisation. For one thing, it puts you ahead of the curve when it comes to compliance with carbon legislation. It can also maintain your competitiveness in an increasingly green marketplace (both investors and consumers alike).

Perhaps most importantly, especially in a time of economic recovery, reducing your waste and embracing resource efficiency lays a clear path to financial stability. This circular economy approach is considered key to creating a thriving, net zero future.

Carbon offsetting won’t be enough

Many big energy users have turned to carbon offsetting to reach their emission reduction targets. However, the IPCC report states that the oceans and forests that once served as a buffer by absorbing CO2 will become less effective, if emissions continue to rise at the current rate. This means that while it is still crucial to develop reforestation and conservation projects, they are not silver bullets.

Instead, companies will be pushed to reduce their emissions as much as possible before turning to offsets solely as a last resort. In this effort, clean energy methods such as green procurement, onsite generation and energy efficiency will play a large role. Responsible waste management, low-carbon transportation and sustainable product design will also be crucial.

We are running out of time

If there is one key takeaway from this new IPCC report, it is the urgency of our state of affairs. Over the last century, temperatures have risen to 1.1°C above pre-industrial levels. If it continues at this rate, the global temperature is projected to increase by more than 1.5°C between 2030 and 2052. This means that the pathway laid out in the Paris Agreement is slipping out of reach.

The promising news is that scientists now have a better idea of what will work. With more accurate projections and a clearer picture of what the future holds if temperatures continue to rise, we are better equipped to drive change. But this change needs to happen now.

How can EIC help?

Our comprehensive energy and carbon services help guide organisations towards a more sustainable future. We can provide a bespoke, adaptable roadmap to net zero for your organisation – ensuring carbon compliance and long-term financial stability along the way. Our extensive energy management services cover everything from metering and monitoring to controls and carbon footprinting.

Our goal is to help companies navigate the transition to a net zero economy. We recognise that while larger policy decisions will drive nationwide decarbonisation, every business will play an important part.

To learn more about our net zero and sustainability services, contact us at EIC today.

REGO prices rise amidst post-Brexit uncertainty

The Renewable Energy Guarantees of Origin (REGO) scheme was designed to provide consumers with transparency about the portion of electricity their suppliers source from renewable generation.

How do REGOs work?

Renewable energy generators are issued with one REGO certificate for every megawatt hour (MWh) of renewable output. This certificate is then sold with an energy contract to prove to the final customer that a share of their energy was produced from renewable sources.

Why are REGO prices rising?

In recent weeks the cost of REGO certificates has increased dramatically, leading to rising renewable electricity contract renewal prices. There are a number of factors driving the increases, including:

  • Lower levels of renewable generation than expected in the UK in the 2020–21 period, reducing the number of REGOs available on the market
  • Higher levels of demand for renewable electricity
  • End-of-year purchasing by suppliers to meet their obligations
  • Uncertainty surrounding the acceptance of European Guarantees of Origin certificates (GoOs) in future
  • Increase in wholesale electricity prices that continue to recover to pre-pandemic levels

These factors mean that customers securing renewable electricity contract renewals are likely to see their prices increase.

Are REGOs used for greenwashing?

REGOs have faced criticism for allowing greenwashing. This is because some suppliers buy power on the wholesale market, which is a mix of all sources including fossil fuels and nuclear. They then separately acquire REGOs to label this power ‘green’. Scottish Power and Good Energy have recently called for regulatory reforms to close these “loopholes” in the market.

Despite these calls for reform, a recent Cornwall Insight’s survey found that 74% of participants felt there had been no improvement in REGOs regulations.

How can EIC help?

The sharpest insights are crucial in today’s volatile markets. We work to ensure that our clients are aware of key market movements and are ready to capitalise on every opportunity.

The EIC Market Intelligence team has extensive knowledge of the electricity and carbon markets and the fundamentals driving them. Interpreting this information is a key component of a successful energy management strategy.

EIC can help your business stay ahead of the curve with market insights and smart procurement so you can make energy management decisions with confidence. To learn more, contact us at EIC today.