IETA’s net zero plan

EIC breaks down the IETA’s proposed ideas to help guide Europe towards net zero 2050, specifically the role cap and trade practices may play and why we must raise ambitions.

Rowing together

Last month the International Emissions Trading Association (IETA) announced its 2020s forecast for the price of carbon emissions, expected to rise to  €32 per CO2 tonne equivalent.

The IETA, in a report published last week, also outlined several ways in which international carbon trading, spurred by the increased price, could aid the fight against climate change.

The report outlined that some countries and firms were better equipped than others to reduce and replace carbon-intensive practices. Infrastructure, resources and trade exports are among the variables that can impede or hasten an organisations ability to stay within allotted carbon allowances while remaining soluble.

The trading of such allowances frees individual states and firms up to offset one another’s emissions in order to achieve the collective goal of limiting global temperature rise.

Moreover, it is effective; the European Union’s Emissions Trading System (EUETS) reported a drop of 29% in emissions from stationary structures when comparing 2018 to 2005, thanks largely to such ‘cap and trade’ schemes.

Cap and trade is not a novel concept, it has been suggested as a market-led solution to polluting industry for years. During his presidency, Barack Obama met with a lot of criticism for introducing a bill in support of such schemes with pundits calling it a “sledgehammer to freedom”.

The concern was not unjustified since it was predicted that Carbon intensive industry would simply be undercut by foreign interests able to offer more competitive energy rates to consumers.

However with international cooperation now being actively encouraged, the attraction and probability of price gouging between domestic and international firms is likely to reduce.

The price is right

Alongside the proposed price rise has emerged a surge of concern that, while ambitious, the UK will fall behind on its own national targets unless an even higher charge is established.

The IETA’s forecast would mean an increase on the €27 price that was in effect from June 2018-19 however, think-tank Carbon Tracker believes this would still fall short of the targets stipulated in the UK’s Green New Deal.

A report released by the Zero Carbon Commission has estimated that the IETA’s price would need to be increased by almost 100% to €60 by 2025 to stay within established carbon budgets.

“We need to introduce a stronger, more consistent carbon price signal across more sectors of the economy if we want to accelerate the transition to a low-carbon economy.”

Sam Fankhauser

Assuming that Fankhauser’s perspective is adopted in the UK, carbon allowance trading promises to become a lucrative venture for firms that are able to significantly reduce their carbon emissions ahead of time. Any shortfall between emissions and allowance could be traded with more carbon intensive firms, thereby effectively doubling the value of carbon emissions saved.

Intelligent utility management, on-site generation and smart procurement are all methods to increase the gap between emissions and allowance and, subsequently, its potential value in cap and trade. EIC offers all of these services as well as over forty years of direct experience in integrating and applying them to the benefit of its clients.

Pause for thought: CCA extension consultation closes

Following the closure of the government’s consultation on reforms and an extension to the CCA scheme on Thursday, EIC explores the success of the scheme so far and the opportunity that this extension presents to business leaders.

Laying a foundation 

During the Spring Budget announcement, Chancellor Sunak made it clear that while the economy would be strained during and after lockdown, its recovery could not come at the expense of UK climate goals.

Little over a month after the budget announcement, the Department for Business, Energy and Industrial Strategy (BEIS) proposed an extension to the Climate Change Agreements (CCA) scheme.

No doubt, this move was designed to engage with businesses that already fit the criteria of the scheme but were unable to join it previously and in doing so allow them to benefit from the reduced CCL cost and the environment to benefit from reduced carbon emissions.

2017 saw the Government aim its sights at a 20% improvement in commercial and industrial energy efficiency by 2030, this goal has informed the consultation with that target being upheld in regards to the extension.

The popularity and effectiveness of the scheme are undeniable, with recent analyses demonstrating that 80-100% of businesses were participating in most eligible sectors.

A consensus of this magnitude inspires hope for the UK’s climate goals, given that, of the UK’s total greenhouse gas emissions, 25% are business driven. An evaluation for the 2017 Clean Growth Strategy also showed that up to 22m tonnes of CO2 could be saved through investments in energy efficiency technology.

An open forum

The BEIS has made clear that facilities that do meet the current criteria would now be able to join the scheme for the first time since its initial closure in October 2018.

The Target Period being proposed, in addition to remaining in line with periods 1-4 of the scheme (running from the 1st January 2021 until 31st December 2022), will be supported by a variation of the certification period. Initially planned to end in March 2023, it would be pushed back to June of the same year to allow participants to gain certification for CCL discounts between April and June 2023. The added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

The CCA’s closing in 2018 had shut out new entrants to the scheme; however, businesses fitting the eligibility now have an opportunity to recoup up to 92% on electricity and 83% on gas CCL charges.

Applications to the CCA can be long-winded and complex, however the return on an initial investment of time is huge, especially considering that an average energy intensive business the added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

Based on these figures, the opportunity presented by Sunak and the BEIS has the potential to dramatically change the landscape of the UK energy industry post COVID-19. Alongside legislation like ESOS, MEES and SECR, the CCA calls for expertise rather than direct action. EIC oversees the entire CCA application process and subsequent management of the service following approval of the application. We will be able to show the fiscal savings based on individual business’s energy consumption and ROI against our typical fees.

Moreover, EIC offers a comprehensive range of compliance services as well as ancillary strategies that can help improve your carbon profile while reducing utility costs.

 

COP26’s race to zero begins

EIC highlights the key points made in COP26 President Alok Sharma’s speech, which symbolised the beginning of the organisations ‘Race to Zero’ campaign, and how business leaders can take a poll position despite the starting gun having already been fired.

Mapping the future

News that the UK will postpone its hosting of the UN climate change conference (COP26) was not unexpected, given the necessity for social distancing that COVID-19 has imposed, however it did raise concerns over the UK’s determination to enact a green recovery post-lockdown.

While the UK track record may, in part, justify some of these concerns, individual safety is not the only benefit of such a delay to talks, for one the nations taking part will need a clear idea of the state of their respective economies once lockdown ends before committing to new policy. 

And from a psychological perspective it might be argued that due to the all-consuming nature of the pandemic when it comes to public and government attention, the conference would not receive the attention necessary if it went ahead this year.

How far we’ve come

Despite the conference now being slated for Q4 2021 (-12 November), Alok Sharma gave a speech last Friday that reasserted the UK’s ambitions and responsibilities with regards to the 2050 net zero target and how the race to zero was already hastening its completion.

The UK, in collaboration with Chile and the U.N., are already leaders of the Climate Ambition Alliance – representing over half of global GDP – however Sharma insisted in his speech that “…we must go further”.

Sharma outlined some of the UK’s major achievements in reducing carbon emissions in the last thirty years:

  • Since 1990 the UK economy has grown by 75% while simultaneously reducing carbon emissions by 43%
  • In the same time, the UK has two offshore wind turbines able to power 2,000 homes, as of 2020 the UK is leading nation for offshore wind capacity
  • Globally, the cost of solar and wind power have dropped by 85% and 49% respectively
  • Over two thirds of the worlds nations can now generate renewable energy cheaper than coal

While details of the path forward remain scant – not surprising given the reasons for postponement – Sharma made it clear that liberating capital to fund green initiatives and widespread support for electric vehicles would be crucial to the UNFCCC’s success.

Approximately 1,000 business leaders, representing revenue totalling in excess £3.5tn have committed to the scheme including British motor giant Rolls Royce. According to the United Nations Framework Convention on Climate Change UNFCCC, around 75% of these businesses have already developed strategies and targets aligned with the 2050 target.

Dr. Alison Doig, international lead at the ECIU (Energy & Climate Intelligence Unit) recently commented on the danger of complacency in the opening stages of such a race. 

“This is not, however, about pushing climate action to some date in the future; no entity can reach net-zero in 2050 without starting now… participants will have to present delivery plans, including setting interim targets for the next decade, by the time COP26 opens in Glasgow next year.”

Clean energy was the first element of the British economy that Sharma cited when referring to the need for green growth after lockdown, making it a pressing issue for business leaders looking to get a head start on net zero. EIC provides comprehensive  support and advice to businesses in the procurement, management and generation of alternative energy sources. Each service forms an element of the robust energy management service that EIC offers.

 

 

 

 

 

 

EIC’s Utility Belt: Tips for more effective utility management

EIC outlines its best advice for intelligent energy management, minor changes that can yield significant savings and the importance of consistency in establishing new workplace cultures.

Technology vs culture 

The majority of your utility belt will be focused on the technology that you are currently using or could utilise in future however there is also a short section on the culture within your business and how that can factor into your success.

Heating and Ventilation 

Comfortable ambient temperature has become something of an assumption, commercially speaking, however the technology behind it often remains unexplored except to establish its basic controls for the user. Given that air conditioning alone can account for up to 30% of a site’s energy consumption, this is a significant oversight that, sadly can be solved very simply.

Sealing off or switching on 

A common method of controlling indoor temperatures is by sealing buildings, preventing windows being left open, however this can actually exacerbate the overall costs trying to be mitigated. It means air conditioning will be working overtime during hotter periods but also that air circulation may take a dip, meaning higher concentrations of CO2 and dampened performance from staff as a result.

IoT connectivity across sites can use occupancy monitoring and responsive temperature and air quality control to mitigate these issues. The provision of real-time data streams means that you can control individual spaces across large sites, maintaining utility usages that are responsive to demand and need.

Casual is smart 

Enstating a casual dress code during acutely hot or cold weather conditions means that staff will be able to offset their own demand on heating or cooling, not to mention be more comfortable in their work. 

Dig for victory

Planting trees is also a relatively cheap and environmentally friendly way to offset heating costs, since they provide shade and fresh oxygen as well as absorbing latent humidity in the air.

Lighting 

Intelligent lighting control can save 30-50% on energy costs automating this utility according to occupancy and respective demand means that you will not have spaces unnecessarily drawing power that isn’t being utilised. 

Let the sunshine in 

Not always an option depending on how sites are initially designed, however by using automated lighting, you can schedule lights to power down during daylight hours and reactivate once night falls. 

Using what you have 

The installation of LED bulbs for better efficiency and a longer lifespan can be an added boost to light use efficiency without being disruptive to pre-installed equipment, motion sensors are another low-impact option that help ensure that light is never wasted.

Professional culture 

As social creatures, culture is effectively the software that our communities run on, understanding this means that you can leverage your professional culture to become more energy efficient with a minimum of cost.

Empowering your team 

The use of environmental posters can help remind team members that their actions have weight in something larger than themselves. Small adjustments like the use of power strips also make it easier for them to adopt the positive habits that will be the foundation of your new professional culture. 

Communicate that computers should be shut down at the end of the day rather than left in standby, especially before the weekend. It has been estimated that a company with 200 PCs could save £12,000 annually this way. 

Breaking ranks 

2020 has demonstrated many things, among them our ability to work remotely and effectively and how doing so can help foster trust between managers and staff members. Encouraging this way of business means you can reduce or re-purpose the amount you are spending on office space and its attached utility costs. The same can be said of meetings that might’ve taken place on-site, by using video technology to bridge these physical gaps you reduce the occupancy on your own sites and the utility usage along with it.

Measure for measure 

Meters and sub-meters are essential tools in understanding the energy needs of a site as well as what areas have the highest concentration of usage. Armed with this information you are better equipped to make policy decisions pertaining to both technology and culture within your utility management. The Carbon Trust has found that a site meter can save 10% in energy costs while sub-metres, which allow you to pinpoint areas where demand is highest, can offer a further saving of 30%.

Going the extra mile

There are a number of additional features that can be added to the design of many sites to both off-set and reduce utility costs including on-site solar generation & storage, combined heat and power and demand side response schemes.

EIC can create a comprehensive and all-inclusive package for your business that oversees all aspects of utility management from metering & monitoring to IoT empowered devices that keep you connected to site data 24/7.

Open architecture technology affords access to all your vital business systems, meaning EIC can communicate with, control and report on any aspect of any site including heating, lighting and ventilation. Our services page contains full details of our offerings.

 

 

 

 

 

Here comes the Sun

EIC explores the benefits and future of on-site solar generation for businesses, how COVID-19 has highlighted and bolstered the strengths of solar power and how EIC can help businesses engage with the technology.

The wild blue yonder

Lockdown, while effective, has been a source of ongoing financial and emotional strain for many in the UK and businesses are no exception. However, there have been a number of benefits to this economic slowing that perhaps are going overlooked.

Chiefly, air pollution, in proportion with industrial energy demand, has dropped significantly. Combined with the severe oversupply of Oil and faltering resilience of fossil fuels generally, this has given solar generation the opportunity to enjoy a moment in the sun. 

However, solar is not a recent arrival to the energy scene, existing theoretically since at least 1839 thanks to French scientist Edmund Bacquerel. Bacquerel’s work was groundbreaking because it was the first time that solid material with no moving parts had been used to convert sunlight directly into electrical energy.

A guiding light

Since 1839, we’ve come a long way and furthest perhaps in the last five years, during which time the costs of solar have halved while storage options have improved consistently with the introduction of graphene and vanadium technology.

The conditions of lockdown have demonstrated that renewable energy sources are likely to be the most resilient to the supply chain disruptions that a major crisis can create. 

In fact, EU solar generation jumped by 28% year-on-year, between March 28th and April 26th of this year compared to 2019, breaking generation records while doing so. 

Energy security is a basic necessity for the survival of any business and, as such, will be a subject of great scrutiny throughout lockdown and in its aftermath. Novel technologies like on-site generation will become more attractive, not only for their resilience but for the savings that their flexibility offers. 

The use of on-site photovoltaics can also improve a company’s carbon profile while providing a measure of protection against supply failure. 

EIC manages around 12TWH each year and with over 40 years industry experience, we are able to create bespoke energy solutions for your needs. We can help you engage with on-site generation, saving you as much as 20% on your energy usage or 40% when combined with on-site battery storage. Better still, in times of plenty, you’ll be able to sell excess energy back to the grid and further offset energy costs. 

Our solutions page contains full details of our on-site generation and storage offerings, as well as further information on the compliance service we provide that can be bolstered by such technology.

 

A road map for change: UK climate goals post COVID-19

EIC outlines the call to action the UK government has received from the Committee on Climate Change (CCC) to ensure that the road map for economic recovery post COVID-19 aligns with existing environmental targets.

Forging a path

Yesterday, Prime Minister Boris Johnson announced proposed easing on several lockdown measures and made it clear that an exit strategy from COVID-19 was being developed to prevent further infection and revive the UK economy.

While the lion’s share of Johnson’s speech was devoted to these adjustments, he reiterated that maintaining social distancing would be critical in ensuring their success.

The next steps, beyond decreased restrictions on travel and exercise, will be in allowing non-key workers to return to work if their role was site-restricted but to remain working at home if possible. Thus the first sparks of economic resurrection appeared.

COVID-19 has ushered in one of the greatest economic cooling periods in modern history, in combination with geo-political tensions it has brought the oil industry to its knees and exposed many of the frailties in existing energy infrastructure.

In his speech, Johnson expressed the gravity of COVID-19, describing it as follows:

 

“The most vicious threat this country has faced in my lifetime…. [of a] kind we’ve seen never before in peace or war.”

 

However fears are now circulating that we will see a retreat away from renewable energy sources as both governments and investors move to revitalise that sector, perhaps at the cost of UK climate targets.

 

An opportunity in disguise

The CCC, among others, have stated that there is no reason that the economic recovery plan cannot be inclusive of UK climate goals. 

 

“Recovery means investing in new jobs, cleaner air and improved health. The actions needed to tackle climate change are central to rebuilding our economy. The government must prioritise actions that reduce climate risks and avoid measures that lock-in higher emissions.”

Lord Deben, CCC Chairman

 

Historically, Lord Deben is correct, perhaps the most dramatic green energy success story in recent history is that of the United States. Immediately after the 2008 financial crisis, the U.S. prioritised funding for clean energy which generated 900,000 jobs in a five-year period.

According to a recent insight from the International Renewable Energy Agency (IRENA), in excess of 17m jobs could be generated globally by 2030 through similar investment now-effectively doubling that work force.

Additionally, IRENA have calculated that this model could yield a global GDP gain of approximately $98tn by 2050, returning in the range of $3 to $8 on every dollar spent.

 

“Things have changed markedly since the last global economic downturn a decade ago – renewables are now cheaper than the alternatives” 

Richard Black, director of the Energy and Climate Intelligence Unit

 

The global picture shows many benefits to leveraging COVID-19 for the purposes of green transition however these gains are logistical as well as financial. As Fatih Birol, head of the IEA, implied, renewables have also proven far more resilient during this crisis:

 

“Only renewables are holding up during the previously unheard-of slump in electricity use…”

Fatih Birol, head of the IEA

 

Upon this rock

The responsibility now falls to the UK government to create and enact policies that reflect its commitment to carbon neutral and to an economy for the future instead of simply offering life support to fossil fuels.

Despite not presenting a comprehensive strategy, the prime minister did comment on the UK’s green trajectory while responding to questions after the announcement. Johnson declared the UK’s resolve in meeting net zero by 2050, pandemic or not, saying “…we know we can do it”.

 

 

Although COP26, this year’s proposed Glasgow climate talks, are unlikely to go ahead, the UK is still considered a global leader in the fight against climate change, however actions taken now will dictate the fortitude of both our economy and reputation in years to come:

 

“The UK now finds itself in a unique position to ramp-up climate action at home and supercharge the international response to climate change abroad…” 

Baroness Brown of Cambridge,CCC Adaptation Committee chair 

 

Thankfully, while the costs of climate inaction are all too apparent, the benefits of a green transition are more and more becoming a matter of consensus, as Richard George of Greenpeace UK states:

“…200 top economists told us that transitioning to a low-carbon economy was the most effective form of economic stimulus… Now the UK government’s climate advisors have reinforced that message… the debate is over.”

The question then becomes how individuals and businesses can contribute to, and take advantage of, this new green trajectory?

No doubt new legislation will be introduced to further incentivise greener business practices, and the Energy Transitions Commission (ETC) has made suggestions along those lines in a strategic document. 

One such suggestion is that the second wave of financial support to UK businesses be conditional on their commitment to climate-friendly policy and practices. 

Leveraging the pandemic in order to pressure businesses into adopting sustainable practices may seem extreme however it is in order to prevent a much greater catastrophe and as such might be viewed as both timely and reasonable.

That being said, legislation and compliance will likely become the government’s major tools in achieving carbon neutral within the industrial and commercial sectors. As such, the value of compliance becomes even more pronounced, particularly given the need to reduce costs during and after a period of low income.

Carbon management then, becomes a vital priority as businesses and management professionals try to anticipate and navigate this possible transition. Not unlike the lockdown itself, social responsibility and personal accountability are at the heart of Carbon management and EIC will develop a bespoke plan for your business that reflects that. 

Combined with in-house compliance and IoT empowered facility management services, EIC can integrate many of the elements of your carbon strategy into a single cohesive framework for the benefit of your shareholders, team members and clients.

 

The green gold rush: CCA extension proposed

EIC explains the government’s proposed extension to the climate change agreements initiative (CCA), the benefits of compliance and how EIC can ensure you qualify.

CCA: How and why

The climate change agreements initiative was established to incentivise the continued and effective implementation of energy efficiency strategies among the most energy intensive industrial sectors.

CCA encourages businesses to streamline their energy usage by offering a 93% reduction on electricity, and a 78% reduction on other fuels accrued as a result of the climate change levy (CCL).

Since its inception in 2013, approximately 700,000 tonnes of carbon emissions have been prevented each year, with businesses using up to 2.3 TWh less energy or enough to power 140,000 homes.

The need for such legislation becomes painfully obvious when framed in the context of energy wastage, in the City of London alone businesses are losing £35m each year this way according to a Green Alliance think tank report.

Originally, the initiative was due to conclude in March 2023 however Chancellor of the exchequer Rishi Sunak announced in the spring budget that there would be consultation on a possible two-year extension to the initiative.

The show goes on

While 9,000 facilities across the UK are already benefiting from the CCA, this extension is estimated to be worth as much as £300m annually in CCL discounts, for the businesses already taking part in the scheme as well as new beneficiaries that would now be able to apply.

It works by encouraging businesses to make improvements to site energy efficiency over an eight-year period. In return, businesses would receive a discount worth as much as £300m annually on CCL bills.

Given the financial uncertainty that COVID-19 continues to inspire, and cooling attitudes towards sustainable development and practices, the news of an extension is welcome on all fronts.

“Extending the Climate Change Agreement scheme will give businesses greater clarity and security at a time when they need it most. This extension will save businesses money while cutting emissions…”

-Energy Minister Kwasi Kwarteng

The consultation will cover proposals for the addition of a new Target Period, from 1 January 2021 to 31 December 2022, an extension of certification for reduced rates of CCL for participants 31 March 2025 and finally, to re-open the scheme, allowing eligible facilities not currently participating to apply to join.

Businesses that had previously missed the opportunity to join the scheme now stand a chance of taking advantage of these savings whilst contributing to a greener economy.

However, it should be noted that the criteria of eligibility for the scheme is not under review, rather the extra time will allow businesses to implement strategies that make them eligible in time for the levy discount to bear fruit.

The new gold rush

The extension proposed, should it be approved, presents a significant opportunity to both current beneficiaries and new comers to the scheme, provided they have the reporting mechanisms in place, to adhere to the scheme.

However, businesses that wish to take advantage of this opportunity in future will need to ensure that they are fully compliant with the scheme as soon as possible, in order to reap the most benefit.

EIC’s expert team of carbon consultants and data analysts are dedicated to offering your business a comprehensive CCA service from initial assessments through data analysis to actionable strategy.

SECR: Why use EIC?

A brief look into SECR, why it matters, the deadlines and reasoning behind the legislation and how EIC can combine it with ESOS in an economic package suited to your organization’s needs.

The Nuts and Bolts

The UK’s Streamlined Energy and Carbon Reporting Policy (SECR), is a piece of governmental legislation that came into effect April 1st of last year. It seeks to consistently highlight the carbon footprint of companies, whilst encouraging long term strategies that are congruent to UK carbon emissions goals.

To that end, the SECR requires companies to provide a detailed report which includes items such as their carbon emissions and energy efficiency / carbon reduction behaviours implemented to redress their overall carbon footprint.

Established as the Carbon Reduction Commitment (CRC) was ending, last year’s regulations will affect approximately 11,900 companies in the UK, considerably increasing the range of influence that the CRC originally enjoyed.

The scheme affects businesses described as “large organisations” within the Companies House terminology. Therefore businesses which have at least a turnover of £36 million, balance sheet of at least £18 million, or 250 or more employees, will be within this category.

SECR works in cooperation with the pre-existing legislation the Energy Savings Opportunity Scheme (ESOS).

 

time-lapse photography of sparkler at night time

 

Year 1 – Act Now

Since the SECR came into effect on April 1st 2019, it means that we now sit on the eve of the first regulatory deadline, with the first trench of qualifying businesses financial year ending in March 2020.

For businesses which also qualify for ESOS, the SECR scheme is a useful tool to provide the necessary data sets required for compliance, making the journey smoother.

As such, we felt that the timing was right to remind our readers of the combined ESOS and SECR package that we offer. The fusing of the two services is designed to remove unnecessary stress and inconvenience with the promise of a dedicated Carbon Consultant.

Finally, EIC also offers a 10% discount to any clients that sign up for a 4-year joint service package, our website contains further details on all of our services and we invite you to find out more should they appeal to you.

Please visit our blog here for the latest news regarding SECR.

 

 

 

 

 

 

Science-Based Targets

A number of large corporations are leading the way in a bid to tackle climate change, with science-based targets.

What are science based targets?

Science-based targets are ambitious emissions reductions objectives, set out by businesses to specify how much they need to reduce their carbon emissions by, to limit temperature rises through global warming. They are considered a positive way to transition to a low-carbon economy.

This transformative action is a consequence of the Paris agreement in 2015 where 195 of the world’s governments committed to prevent climate change. A target was set, limiting global warming to below 2°C above pre-industrial levels, to a level of warming of 1.5°C.

The targets set for businesses to reduce GHG (greenhouse gas) emissions to meet this target, are referred to as ‘science-based’ if they are in-line with this temperature goal.

A united initiative

An initiative for this was set up by CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC). It focuses on companies that have set science-based targets to highlight the positive effects such as increased innovation, strengthened investor confidence and improved profitability.

In addition, the initiative:

  1. Defines and promotes best practice in science-based target setting via the support of a Technical Advisory Group.
  2. Offers resources, workshops and guidance to reduce barriers to adoption.
  3. Independently assesses and approves companies’ targets.

What are the benefits of setting science-based targets?

There are many benefits to setting science-based targets. As well as saving the planet it;

  • Illustrates excellent CSR – for large corporates there is almost a responsibility to take action against climate change, science-based targets are a way to do this.
  • Delivers a competitive advantage – helps your business to stand out in a crowded marketplace.
  • The whole company can be involved – you can engage both internal and external stakeholders to help your business achieve or even exceed your targets.
  • Provides Investor confidence – 52% of execs have seen investor confidence boosted by targets (sciencebasedtargets.org).
  • Increases innovation – 63% of company execs say science based targets drive innovation (sciencebasedtargets.org).

How do you set a science based target?

There are three science-based target (SBT) setting approaches:

  1. In a sector-based approach the global carbon budget is divided by sector and emission reductions allocated to individual companies based on its sector’s budget.
  2. With an absolute-based approach all companies will equally work towards the same percent reduction in absolute emissions.
  3. Economic-based approach – A carbon budget is equated to global GDP and a company’s share of emissions is determined by its gross profit, since the sum of all companies’ gross profits worldwide equate to global GDP.

How do businesses get involved?

For a business to get involved in the initiative there is a simple 4 step process to follow:

  1. Submit a letter to say you are committed to the scheme.
  2. Develop your own science-based target within 24 months.
  3. Submit your target for validation.
  4. Announce your target.

838 companies are currently taking science-based climate action and 343 companies have approved science-based targets.

How EIC can help

We can help you create science-based targets as part of a Carbon Management Plan that can also incorporate Net Zero goals. We’re already partnering with leading UK private and public sector organisations supporting them to transform their operations in line with ambitious targets that will help to save the planet and future-proof their business.

EIC can assist in meeting your science based targets by:

  • Establishing your carbon footprint to act as your baseline
  • Provide recommendations to reduce your carbon impact
  • Set your target to reduce your carbon footprint to meet the 5°C objective
  • Create an ongoing Carbon Management Plan
  • Create and publish all documentation required for the scheme
  • Work with you to embed the strategy into your business
  • Assist you with carbon offset strategies

We can also provide marketing packages for use both internally and externally, to assist with CSR around your targets.

Budget 2020

The new Chancellor, Rishi Sunak, has delivered the first Budget since the UK set its 2050 Net Zero target last year. The previous Chancellor, Sajid Javid, had promised a “green” Budget, however the current health crisis caused by the spread of COVID-19 had cast doubts on how much time Mr. Sunak would spend on energy and the environment.

Below, we highlight key announcements:

Carbon reduction schemes

The government announced a Carbon Capture and Storage (CCS) Infrastructure Fund to establish CCS in at least two UK sites. One by the mid-2020s and a second by 2030. CCS is a technology that involves the capturing of carbon dioxide emissions created by fossil fuels during energy generation. The CO2 can then be transported and stored safely.  There are currently no operational commercial CCS facilities in the UK to date. However, there are a small number of pilot projects currently in development.

The Chancellor also announced a Green Gas Levy, designed to help fund the use of greener fuels. This is in effort to encourage more environmentally-friendly ways of heating buildings through a new support scheme for biomethane. In addition, the Budget stated that the government will increase the Climate Change Levy (CCL) that businesses pay on gas in 2022/23 and 2023/24 (whilst freezing the rate on electricity). It will also reopen and extend the Climate Change Agreement (CCA) scheme by two years.

Further announcements saw the Renewable Heat Incentive (RHI) scheme extended for  two years until March 2022. This is alongside a new allocation of flexible tariff guarantees to non-domestic RHI in March next year. The government said these efforts would “provide investment certainty for the larger and more cost-effective renewable heat projects”.

Electric vehicle infrastructure

Road transport is currently responsible for approximately one fifth of all UK emissions. To reduce this the government has announced investment in electric vehicle charging infrastructure with aims that “drivers are never more than 30 miles from a rapid charging station”.  The government will invest £500 million over the next five years to support the rollout of a fast-charging network.

The government is still considering the long-term future of incentives for zero-emission vehicles alongside the 2040 phase-out date consultation. In the meantime, £403 million will be provided for the Plug-in Car Grant, extending it to 2022/23, with a further £129.5 million to extend the scheme to vans, taxis and motorcycles. In addition there will be an exemption of zero emission cars from the Vehicle Excise Duty (VED).

Natural environment

The Budget has announced a Nature for Climate Fund, which will invest £640 million in tree planting and peatland restoration across England, representing the coverage of an area greater than Birmingham over the next five years. Additionally, the announcement of the Nature Recovery Network Fund and the Natural Environment Impact Fund will each provide avenues for environmental restoration and sustainable development.

Future reading

In the build-up to the COP26 Climate Summit, to be hosted in Scotland later in the year, HM Treasury will publish two reviews. One into the economic costs and opportunities associated with reaching Net Zero and the other into the economics of biodiversity.

In summary

Reactions to the Budget have been a mixed bag. It’s been cited as simultaneously the greenest modern Budget to date and a missed opportunity regarding the larger climate picture. The government has announced a number of positive policies that will begin to pave the way for the Net Zero transition. However, the decision to freeze fuel duty for the tenth year in a row and investment of £27 billion into new roads will be regarded as counter-productive to ambitious targets.

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Climate Emergencies and Net Zero – what you need to know

Global scientific data supports action

The action follows a highly critical 33 page report publicised in 2018 by the Intergovernmental Panel on Climate Change (IPCC). The IPCC is the United Nations body for assessing the science related to climate change.

The report focused on the impact of limiting global warming to 1.5°C. Limiting warming to 1.5°C rather than 2°C significantly reduces the climate change risks according to Professor Jim Skea, who co-chairs the IPCC.

What’s alarming is the scale of the challenge ahead of us to ensure we achieve these targets and do not allow the situation to escalate further.

Five steps to achieving the 1.5°C have been announced:

  1. Global emissions of CO2 need to decline by 45% from 2010 levels by 2030
  2. Renewables are estimated to provide up to 85% of global electricity by 2050
  3. Coal is expected to reduce to close to zero
  4. Up to seven million sq km of land will be needed for energy crops (a bit less than the size of Australia)
  5. Global net zero emissions by 2050.

Paris Agreement

The Paris Agreement brings together nations towards a common cause to undertake ambitious efforts to combat climate change. It was originally signed by 196 countries back in 2016.

In line with the IPCC report its core aim is to keep the global temperature increase this century well below 2°C above pre-industrial levels. In particular, to pursue efforts to limit the temperature increase even further to 1.5°C.

2019 – a watershed year for climate change?

Together with the impact of Greta Thunberg – the 16 year old Swedish activist – there have been a number of key factors driving the climate change movement this year. At Glastonbury festival in June 2019, 2,000 festival goers joined protestors to stage a procession across the site.

At the United Nations Climate Action Summit in late September you may have missed the news that Russia, the world’s fourth largest polluter will finally join the agreement. This announcement was overshadowed by the stirring “You have stolen my dreams” headlines surrounding Greta Thunberg’s appearance. Hailed as “the voice of the planet” she’s already been nominated for the Nobel Peace Prize.

Despite the raised awareness there are real fears that most of the world’s biggest firms are ‘unlikely’ to meet the targets set. Only a fifth of companies remain on track according to fresh analysis by investment data provider Arabesque S-Ray. Of 3,000 listed business only 18% have disclosed their plans.

UK reaction

In reaction to the IPCC report, UN Paris Agreement and other related research findings and movements, the UK public sector is taking positive, proactive steps to mitigate climate change risks.

Councillor Carla Danyer led the charge in Bristol by first declaring a climate emergency and this has sparked a wave of similar responses.

In June 2019, the UK became the first major economy to pass a net zero emissions law. The new target will require the UK to bring all greenhouse gas emissions to net zero by 2050. Net zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage. Other countries setting similar targets include Ireland, Denmark, Sweden and France as well as the US state of California.

Many UK councils, NHS Trusts and universities have publically declared their long term targets. Some aiming for speedier action by declaring net zero 2030 targets. These include Ipswich Borough, Vale of Glamorgan and Telford & Wrekin councils.

Unsurprisingly, Bristol University is one of the leading educational facilities leading the way. To date they’ve cut carbon emissions by 27% and are well on their way to achieving their target to become carbon neutral by 2030. The University of Cambridge, along with others, has set a net zero target of 2038 and has announced it is adopting science-based targets. On one website – climateemergency.uk – 228 councils are listed as having signed up to the targets.

In Boris Johnson’s first speech as Prime Minister, he affirmed the UKs commitment to a net zero future. Johnson proclaimed “Our Kingdom in 2050… will no longer make any contribution whatsoever to the destruction of our precious planet brought about by carbon emissions,” he said. “Because we will have led the world in delivering that net zero target.”

Steps towards a better future

According to the Centre for Alternative Technology (CATs) Zero Carbon Britain research a modern, zero emissions society is possible using technology available today.

Below we’ve outlined some key initiatives that can help the UK achieve its net zero ambitions:

  • Businesses implementing science-based targets.
  • Improving built environment efficiencies. Upgrading old buildings and ensuring new buildings must meet higher energy efficiency standards.
  • A shift to electric vehicles and the continued battery storage revolution.
  • Decentralised energy. Home and local energy generation.
  • Shift to renewable energy sources.
  • New policy.

The Aldersgate Group issued a green policy manifesto to Boris Johnson on 1 August 2019. They are a politically impartial, multi-stakeholder alliance championing a competitive and environmentally sustainable economy. Members of the group include Friends of the Earth, BT, M&S, Tesco, National Grid and Sky. Their green manifesto focuses on 4 key areas for the government to take decisive action and provide greater policy detail:

  • Delivering a Clean Growth Strategy Plus (CGS+) that matches the ambition of the net zero target. This should consist of a targeted update to the existing Clean Growth Strategy to increase ambition where required (for example on zero emission vehicle roll-out). Plus it should incorporate concrete policies that accelerate private sector investment to decarbonise priority sectors. These include surface transport, buildings and support the competitiveness of industry during this transition.
  • Passing an ambitious Environment Bill that safeguards environmental protections currently enshrined in EU law. They believe it must set ambitious and legally binding targets for environmental improvements in line with the vision of the 25 Year Environment Plan.
  • Implementing the Resources and Waste Strategy, through the introduction of detailed regulatory measures and fiscal incentives that drive greater resource efficiency and cut waste across the economy.
  • Building on the Green Finance Strategy, to rapidly grow private capital flows into the green infrastructure required to deliver the UK’s net zero target and the objectives set out in the 25 Year Environment Plan.

Our view

At EIC we believe new government policy is one of the most important steps needed to turn sentiment into action. Legislation relating to major energy users such as ESOS and SECR are steps in the right direction but they aren’t enough. Without doubt more effective policy is needed, to not only ensure energy and carbon is measured, but also that carbon reduction strategies are developed and implemented across the UK. Too often business cases for energy and carbon reduction are created and filed, never to be signed off.

The end of CRC

The final reporting period for the Carbon Reduction Commitment Scheme (CRC) concluded in March this year. Qualifying companies now only have to manage the final elements of the scheme: ensuring they have purchased and surrendered sufficient allowances to finalise Phase 2 reporting.

The CRC scheme ran for eight years, from April 2010 to March 2019. It covered approximately 10% of the UK’s carbon emissions, and raised roughly £790 million annually for the exchequer.

Qualifying businesses

Qualification criteria for CRC Phase 2 was determined as organisations with at least one half-hourly meter using 6,000 megawatt hours or more of qualifying electricity. This was a simpler method of working out relevant organisations and was implemented following Phase 1 feedback that the system was too complex. The seemingly sensible criteria did a good job of identifying significant energy consumers with a test that was simple.

An issue arose however with qualification being considered only in the period April 2012 to March 2013, and then lasting for all subsequent years in the phase. As time went on, there was an increase in companies who qualified, but had subsequently sold off the (usually industrial) sites that made them qualify for the scheme. This left comparatively low energy users stuck in a scheme for which they were no longer suitable. The qualification criteria became less effective over time. We learnt that rolling qualification criteria for schemes helps to avoid this problem and keep qualifying members relevant.

The impact of ‘greening the grid’

The CRC scheme also changed significantly due to the “greening of the grid”. The government’s electricity conversion factors, which denote the amount of carbon dioxide equivalent emissions associated with consuming a fixed amount of electricity, fell approximately 15% year on year over the last three years of the scheme.

This meant that in three years the number of allowances required to cover a fixed amount of electricity, halved. Some members of the scheme were caught out by this, and held a large number of prepaid allowances which were no longer needed due to the drop in conversion factors that was not forecast. This also had a big impact on the total tax revenue generated by CRC, and if the scheme were to continue, we would expect this to be addressed in a review. We learnt that if part of a carbon scheme’s purpose is to raise tax, then there are factors that can unexpectedly influence this.

The future of compliance

Now the CRC scheme is closed, we see a new future opening for carbon compliance. The tax-raising component of CRC has been incorporated into the Climate Change Levy as an increased flat rate across business energy bills in the UK for firms who pay 20% VAT. This is charged per kWh of energy, and so tax revenues are easier to forecast and less likely to change. However, this has shifted the tax burden initially placed on high emitters to being evenly spread across a wider group of energy bills.

The reporting side of CRC has been followed by the new Streamlined Energy and Carbon Reporting (SECR) scheme. This has a larger footprint of approximately 11,000 qualifying firms, and the new qualifying criteria is attached to accounting standards which is both simple and applicable year on year. We welcome the increased attention on emissions that will be generated by the SECR scheme.

Talk to the EIC team

EIC can offer a full review of your organisation to assess your legal obligations and compliance status. We offer ESOS, SECR, Air Conditioning Inspections, Display Energy Certificates and much more, see our full suite of services here. We’ll provide you with a Compliance Report that will summarise our findings, explain the legislation, and outline your next steps.

Our in-house team includes qualified ESOS Lead Assessors and ISO 50001 Lead Auditors, as well as members of the Chartered Institution of Building Service Engineers (CIBSE), the Register of Professional Energy Consultants (RPEC), and the Energy Institute. Call us on 01527 511 757 or contact us here.