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Energy & Carbon Update November 2017

News from Inenco’s energy and carbon compliance team

UNCCC Conference

The UN Climate Change Conference in Bonn took place between the 6th and the 17th November.

The Paris Agreement aims to keep the increase in average global temperature to under two degrees above pre-industrial levels. However, as current research suggests that temperature is changing faster than previously understood, it is hoped that a more ambitious target of 1.5 degrees can be agreed.

Global CO2 concentration in 2016 reached a level not seen for 800,000 years, according to the WMO, highlighting the need for ambitious and urgent action.


UK Clean Growth Strategy published

The UK’s Clean Growth Strategy was published in October. This sets out a path to a low-carbon economy by 2050. An official summary can be found here. Inenco’s overview is here.

Simultaneously, the long-awaited consultation on the energy and carbon reporting scheme to succeed CRC was also published by The Department for Business, Energy & Industrial Strategy (BEIS). Under Streamlined Energy and Carbon Reporting (SECR), it is proposed that large UK companies will be required to report energy consumption and greenhouse gas emissions from their direct electricity, gas and transport use. An Inenco briefing can be found here.


CDP consultation

CDP has recently consulted on proposed changes to its annual questionnaire for the 2018 to 2020 disclosure cycles.

It is suggested that a small number of sector-specific questionnaires will be introduced from 2018 to allow more relevent responses and introduce an element of sector-specific scoring.

Science-based targets are also expected to receive more prominence, and further alignment with other reporting initiatives such as GRI is proposed.

A tiered scoring system may be introduced to encourage first-time respondents by allowing reduced disclosure.

Finally, the updated scoring methodology for calendar year 2017 is expected to be published in February/March 2018.


EUETS changes 

The Department for Business, Energy & Industrial Strategy (BEIS) is consulting on the idea that the 2019 annual report and allowance surrender deadlines be brought forward to 29th March 2019. This is to allow the 2018 reporting cycle to be complete before the Brexit departure date.

The UK Government also proposes to accept suspending issuing UK allowances between January and March 2019 (although see the EC’s proposal below).

The BEIS consultation on this matter closes on the 24th November. The consultation document can be found here.

The European Commission has separately proposed that any freely allocated or auctioned allowances to UK sites from 1st January 2018 will not be valid for surrender for calendar year 2017 onwards. This may mean that some UK companies will be required to purchase allowances on the open market, in lieu of using their free allocation. This measure is intended to avoid a post-Brexit allowance surplus, should the UK leave the EUETS from 2019.

We await further clarity from the UK and the EU, with the outcome dependent on ongoing Brexit negotiations.  Further information can be found here.


Medium Combustion Plant (MCP) Directive

A 2015 EU Directive which enters into national law from next month limits permissible emissions from medium-sized diesel generation plant, defined as that rated between 1-50 MW thermal input.

The aim is to fill a regulatory gap between large plants of more than 50 MWth, already covered under the Industrial Emissions Directive, and smaller appliances such as heaters and boilers under 1MW which are already covered by the Ecodesign Directive.

Emission limits apply from 20 December 2018 for new plant, and by either 2025 or 2030 for existing plant (depending on size).