Tuesday, November 08, 2011

Big organisations' carbon emissions made public for the first time

The public is now able to see for the first time which companies and organisations are making a real effort to reduce their carbon emissions and which are not.

The carbon savers and the carbon slackers have all been made visible under the first Performance League Tables of the Energy Efficiency Scheme, published today by the Environment Agency.

This mandatory scheme, which was introduced in 2008, was originally touted to contain about 3,000 UK organisations whose half hourly electricity consumption totalled more than 6,000 MWh per year (equivalent to approximately £500,000 annual spend) in 2008.

In the end the table contains 2,106 businesses due to exemptions under Climate Change Agreements (CCAs) or EU Emissions Trading System (EU ETS) to prevent businesses being taxed twice.

Between them they are responsible for up to 10% of the UK’s emissions.

The tables show the relative performance of all participants in CRC against their Early Action Metric (%), which represents the average percentage of the proportion of non-mandatory CRC electricity or gas supplies measured through voluntarily installed 'automatic meter reading' meters or dynamic supply in year 1 and CRC emission coverage by the Carbon Trust Standard or equivalent.

The better an organisation performs in terms of cutting its emissions, the higher it appears in the annual performance league table.

Twenty two organisations have scored 100% in the 'early action metric', to take joint top spot, including (thankfully for them) Ofgem, DECC and Manchester United Football Club, who join British American Tobacco, Center Parcs, and several NHS foundation trusts.

At the bottom of the league come many hundreds more organisations who scored zero or close to zero.

They include some big names like Veolia waste services, Kingfisher group, IKEA, Standard Life, American Express, Bombardier, Care UK, Citibank, Coca Cola HBC Northern Ireland, CRC MANAGEMENT II LIMITED (ironically), Crown UK Holdings, Dell computers, HMRC, Kingspan insulation, and many London Boroughs.

Also shamed at the bottom are the pension schemes of National Grid and BT, many other NHS trusts, Orange Business Holdings, Pepsico, Rio Tinto, Carphone Warehouse, Thomson Reuters and the UK Atomic Energy Authority, Virgin Atlantic and many universities.

The problem with the ranking is that the reason for a zero ranking may simply be that no smart meters were installed. This is especially interesting in the case of several who have shouted very loudly about their green credentials, like IKEA.

The Carbon Trust's mantra has always been that 'what is not measured cannot be saved', and so the CRC is a definite encouragement at the very least for participants to install meters.

Errors in the data

Errors are already showing up in the data.

IKEA has complained that it entered its data imcorrectly (and this corrects our earlier version of this piece) when it input its emissions usng figures under the Carbon Trust Standard. In fact its ranking should be 381st not 1299th.

However, the EA website says that all participants were given a chance to check and verify their data until 27 September.

They say that "Since then a small number of organisations have notified us of amendments which, had they been reported before 27 September, may have changed the organisations' positions in the PLT.

"This PLT has been independently validated by AEA Technology and is fixed based on the 27 September reported data."

Their website does say that waste company Veolia's position is also wrong. Since it is able to claim Energy Generating Credits, its net emissions as defined under the CRC are negative.

But the CRC scheme design did not envisage there would be zero or negative emitters when calculating the Early Action Metric (EAM) score, and so Veolia's early actions are not properly reflected in the Performance League Table!

Where the net result is zero or negative emissions, the CRC Registry cannot calculate a score for the EAM based on the amount of emissions covered by a carbon management certification scheme regardless of actions undertaken by a participant.

Moreover, Pepsico, also ranked 1299th, became in January the first company in the world to use te Carbon Trust's Carbon Product Footprinting as a management tool to drive green growth across its supply chain.

Its activity in this and other respects should earn it some Early Action Metric points.

Also there is no credit given in the criteria for improvements companies have made as part of a Climate Change Agreement.

This means that they appear far down in terms of performance when, by definition, of being part of an agreement they have substantially improved their energy efficiency and been taking energy-saving measures since 2001.

EEF, the manufacturers organization, was quick to criticse this. It s Head of Climate & Environment, Gareth Stace, said this "does not fill us with hope that government has fully taken stakeholder views into account," and this may "not bring about the behavioral changes that government is hoping for.

"Many companies will be worried that this mis-representative data will affect their reputation in un-warranted ways.”


It is possible to look closely at each business' responses.

Here, you find out for example that Manchester United, despite coming joint top, gave no answer to the questions about whether it discloses carbon emission reduction targets in its annual reporting, has anyone in charge of energy management or "actively engage employees to reduce carbon emissions at work".

A spokesman for the Environment Agency, said: "The 2011 league table shows that over 60 per cent of organisations have taken action by installing smart meters and obtaining a certificate for 'good energy management' from the Carbon Trust or other accreditation scheme.

"The table also shows participants' annual carbon emissions - although they are not ranked on them this year."

As well as reducing carbon emissions, the scheme is intended to help participants save money by reducing their energy bills.

John Field, Director of Power Efficiency Carbon Management, which provides CRC compliance services to a number of major corporate and public sector clients, says the process has been a "wake-up call," and helped to "take energy management out of the plant room and into the board room". Compliance levels have been high, he says, including all the cases PECM has dealt with.

"Given the background of rising energy prices, this is a real opportunity for bodies to get to grips with managing their energy use. It's the first time they have had to make a concerted effort to create a separate budget for energy use."

Participants had to submit their first reports, describing their energy consumption from 1 April 2010 to 31 March 2011, by the end of July to the Environment Agency.

They contain a CRC Footprint Report and an Annual Report, which accounts for their energy usage from all sources across all of their sites.

The Footprint Report is important because it defines which emission sources they have to report every year over the next three years.

Crucially, it demonstrates whether at least 90% of emissions are covered by any of the EU Emissions Trading System (EU ETS), a Climate Change Agreement (CCA) or the CRC.

If this was done effectively, companies would have reduced their costs by 10%, as the pollution sources cannot be changed during this period.

Organisations are also exempted from the Carbon Reduction Commitment scheme if they have a Climate Change Agreement under the EU-ETS.

The Agency has now finished verifying and comparing these figures and published the first of its annual league tables which enable everyone to see how well, or how poorly, participants have done.

The idea is to name and shame or praise the supermarkets, universities and other bodies who are registered.

If an organisation makes mistakes, by inaccurately reporting emissions or if it submitted data beyond the deadline, it is subject to fines.

The price of allowances

From April next year, participants must surrender allowances, each one equivalent to one tonne of CO2, by buying enough credit to cover their previous emissions.

Their currently proposed price for these is £12, but the Treasury may change this as a result of the next Budget.

It is likely to be harmonised with the value of the carbon price floor, thought to be going to be £13, for the sake of simplicity.

But given that the market value of carbon now is significantly lower than £12, there are calls from participants for the value of allowances to be lower too, to minimise costs especially from heavy energy users.

However, developers with high initial capital costs, like nuclear and offshore wind, are calling for a high carbon floor price to help provide the finance they need.

The CRC is now a straightforward carbon tax, but originally, under Labour, the proceeds were supposed to be recycled back into energy efficiency.

If the value of an allowance were to be £12, then the Treasury would receive approximately £750m on initial analysis of these figures – significantly less than the £1bn it had said it expected to receive.

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