Home » News & Events » News » Renewable Energy Procurement and Carbon Offsetting

Renewable Energy Procurement and Carbon Offsetting

Published on 13/11/2020 by Acclaro Advisory
wind turbines

There is just over a week left to respond to the UKGBC’s consultation on their proposed guidelines for renewable energy procurement and carbon offsetting. So what’s it all about, and why is it important to have your say?

The challenges

Neither of these subjects are new, and the complexity, uncertainty, and accusations of greenwashing have been debated for years. But with the latest drive for net-zero commitments, together with an ever-increasing demand for scrutiny and transparency in reporting, it’s more important than ever that responsible businesses are addressing their emissions in the right way.

The challenges relating to both concepts arise from the separation between the purchasing organisation and the product it is acquiring. A factory which installs solar panels on its roof has a direct link to the energy generated – staff, visitors, and neighbours can see the panels and understand in a very simple way the impact it has on the factory’s emissions. However, if those panels are located in a field two hundred miles away and energy is purchased from a supplier with a complex energy mix via the National Grid, the impact on the factory is much less tangible. Similarly, when purchasing carbon offsets to support a reforestation project halfway across the globe, it’s hard to monitor, understand and satisfy yourself that those tonnes of COare really being addressed.

Principles for assessing quality

The UKGBC’s proposed guidance brings together a number of principles for assessing the quality of schemes, and allowable routes for net-zero in different circumstances. For renewable energy procurement, the principles are:

  • Energy Attribute – Is it supported by appropriate certification, exclusively owned?
  • Renewable Source – Is the power the organisation uses actually renewable?
  • Additionality – would this renewable energy be generated anyway?

It won’t be practical or even possible for every organisation to meet the highest quality criteria for each of these, and the guidance allows for a variety of options. But it does place an increased emphasis on transparency – reporting why a particular approach has been taken, and improvement – looking to move to higher quality schemes at the next procurement cycle. It also seeks to inform and advise organisations to ask the right questions of their suppliers – If I pay a premium to be on a green tariff, will it actually improve the fuel mix, or just make someone else’s tariff dirtier?

In terms of offsetting, the quality principles are well established and organisations such as the Clean Development Mechanism and Gold Standard are in place to ensure schemes are addressing the key issues. These include:

  • Additionality – Would the project be going ahead without this investment?
  • Avoid Leakage – Are the emissions being saved or being moved elsewhere?
  • Measurable – can savings be quantified against a baseline?
  • Real – Has the project actually taken place?
  • Permanence – is there a risk of reversability?
  • Independently verified – Has an independent third party verified the savings?
  • Unique – Are carbon credits registered to owners, tracked and retired when the savings are claimed?
  • Transparency – is information about the credits publicly available?

Concerns remain, driven in part by the very variable and sometimes incredibly low market prices of offset credits, and confidence in offsetting is not particularly high. There is an ongoing consideration of domestic vs international offsets, which will become more important as an industry for carbon capture and storage in the UK develops. The UKGBC guidance seeks to make offsetting regimes more robust by ensuring approaches go above and beyond. This could be either by UK Twinning  (doubling up on offsets through a UK scheme), or a Transition Fund (establishing an explicit carbon price and investing additional funds in net-zero aligned projects).

Guidance to suit a range of needs

The ultimate aim is to ensure that claims of net-zero are robust and transparent, and the market is driven towards higher quality schemes over time. Mechanisms must be stringent but flexible, as different organisations face different challenges and priorities.

The proposed guidance has been built up by an interdisciplinary task group, meeting over Zoom to discuss and debate many aspects. While we’ve tried to consider every scenario and account for every limitation, it’s vital to get feedback from across the industry. The consultation is open until Tuesday 24th November, so go to https://www.ukgbc.org/news/ukgbc-consults-on-renewable-energy-procurement-and-carbon-offsetting-guidelines/ to have your say.

Related Articles