The second contains a case study of how FTSE-100 insurance giant RSA Group use Ecometrica’s environmental accounting software Our Impacts to reduce their emissions, meet regulatory requirements and compile otherwise complicated CDP reports.

Use the link below to view the articles in full on www.computing.co.uk:

Essential Guide to Carbon and Energy Management >

Emissions management case studies: RSA and Swiss Post >

On the 1^st January 2012, all emissions from airlines flying in and out of the European Union came under the jurisdiction of the EU Emissions Trading scheme (ETS).  Airlines will have to account for, and acquire an emissions permit for each tonne of carbon dioxide (CO₂) emitted by their flights.  All flights arriving at or departing from EU airports are covered, regardless of the nationality of the aircraft operator.

The total amount of new permits released to accommodate the introduction of air travel in the ETS will be calculated as 97% of a benchmark emissions level from the period 2004–06.  The growth in air travel since this period means that airlines will have to purchase extra allowances to cover current emissions levels.  It seems likely that for 2012 around 30% of carbon dioxide emissions from the airline industry will need to be covered by purchases through an ETS ‘aviation auction’ and purchases on the ETS market, while around 70% of permits will be freely given to airlines.

Data taken from: http://ec.europa.eu/clima/policies/transport/aviation/index_en.htm

There has been much debate on what the effect on prices and profits will be for consumers and airlines respectively.    A recent article in the Journal of Transport Management has suggested that the allocation of free permits to airlines could deliver windfall profits to the industry of up to $2.6 billion over eight years if airlines are able to pass on all the extra costs of the ETS to consumers (Malina 2012).

Airline Reaction

Following the European Court of Justice’s rejection of an American challenge to the legitimacy of including American airlines in the ETS, Hilary Clinton announced that if US airlines are not exempted from the EU ETS then the US government will be “compelled to take appropriate action” in response.  Whether this represents the opening shots of a transatlantic trade war, or is a hollow demonstration of support for the US airline industry remains to be seen.

The Chinese Air Travel Association (CATA) has said that its member airlines will not cooperate with the ETS and refuse to take part in the emissions allocation scheme.  The deadline before which permits must be purchased for 2012 is the 31^st March 2013; so there is time for further negotiations.  The fine for non-compliance with the scheme is a penalty of €100 per tonne of CO₂ emissions.

Ryanair’s communications director recently announced that including aviation in the ETS “reduces the competitiveness of EU air transport with yet another misguided ‘environmental’ tax, which does nothing for the environment but penalizes EU consumers and families” (Ryanair Press Release 2012).

In theory the EU ETS should be less burdensome on efficient operators such as Ryanair.  However, the ETS will always represent an additional cost to airlines, and this is likely to be the reason for Ryanair’s opposition to the scheme.

The price response to the ETS has been for airlines to add surcharges to the cost of flights.  Delta was amongst the first to announce a $3 extra charge on transatlantic flights; United Continental, US Airways and American Airlines then immediately followed suit.  Within the EU, Ryanair has announced a surcharge of €0.25 on all European flights.

Using Defra emission factors, we can estimate how much of the ETS costs these airlines are passing on to customers[1]:

Transatlantic flights

- For a long-haul flight from London to New York (5,576km), an economy class passenger is (based on Defra’s emission factors, including the indirect route uplift of 9%) responsible for emitting approximately 489.69kg of CO₂.

- Assuming the current ETS price of around €8 a tonne, and that the airline must purchase permits to cover 30% of total emissions, the extra cost to airlines on a London to New York flight will be €1.18 ($1.54 – at 6/02/2012 exchange rate).

The response from the American airlines, to impose a surcharge of $3 on transatlantic flights, is effectively the passing on of double the cost of the EU ETS scheme to customers.  In their defence, the airlines might argue that they must protect themselves against potential volatility in the carbon price.  Indeed the lobbying from the US airline industry and the relatively high surcharge may be based on a presumption of future price rises.

Ryanair European flights

- The average Ryanair flight distance was 1,064km in 2010 (Ryanair annual report 2010)

- For this average Ryanair flight, and based on Defra emission factors, 105.98kg of CO₂ is attributed to each passenger.

- Ryanair has one of the highest passenger loading factors in the airline industry (their planes carry 5% more passengers than the industry average; Brighter Planet report 2011), so the emissions attributed to each passenger on a Ryanair flight will actually be less; this calculation is adjusted to reflect Ryanair’s higher efficiency.

- Assuming the ETS price remains at around €8 a tonne, and that the airline must purchase permits for 30% of total emissions, the extra cost to the airline per passenger as a consequence of joining ETS will be approximately €0.24.

Ryanair’s response appears to be far more generous than the transatlantic operators as their surcharge of €0.25 only covers slightly more than 100% of the extra ETS costs at the current carbon price.

References

Brighter Planet Report (2011) Air Travel, Carbon and Energy Efficiency http://www.ryanair.com/doc/about/ryanair_brighter_planet_2011.pdf

Defra (2011).  2011 Guidelines to Defra/DECC’s GHG Conversion Factors for Company Reporting  http://archive.defra.gov.uk/environment/business/reporting/pdf/110819-guidelines-ghg-conversion-factors.pdf

European Commission: Reducing emissions from the aviation sector http://ec.europa.eu/clima/policies/transport/aviation/index_en.htm

Malina, R., (2012). The impact of the European Union Emissions Trading Scheme on US Aviation.  Journal of Air Transport Management 19: 36–41

Ryanair website – passenger load details: http://www.ryanair.com/en/investor/traffic-figures

Ryanair annual report 2010: http://www.ryanair.com/doc/investor/2011/Annual_Report_2010_Final.pdf

Ryanair press release (2012) Ryanair to Introduce ETS Levy to Cover New EU Eco-looney Tax http://www.ryanair.com/en/news/ryanair-to-introduce-0-25-euro-ets-levy-to-cover-new-eu-eco-looney-tax

Commenting on the investment, Seth Tabatznik, director of Berti Investments, said: “At Berti Investments we aim to benefit society by investing in scalable businesses that can make a significant environmental impact. Ecometrica makes a perfect fit, with their market-leading solutions and in a sector with significant growth potential. Backed by clients, such as RSA, BP and Petkim, they are already expanding on a global scale.

“Carbon accounting is becoming increasingly common for many large and mid-sized companies, due to a number of external pressures, and we’re seeing that the companies that have transparent greenhouse gas accounting processes in place are actually performing better. To put it simply, you can’t visibly improve what you can’t measure.”

“Berti Investments will use Ecometrica’s greenhouse gas accounting service to measure its own carbon impact, and the impact of all its investments, including those in its landmark Berti Green Accelerator programme.”

Dr Richard Tipper, chief executive of Ecometrica, added: “Berti’s investment will support our global ambitions and underscores the credibility of our success with developing market-leading services and solutions. We share Berti’s values and commitment to promoting best green business practices and are delighted to have obtained their support. We look forward to working with Berti Investments and its portfolio of companies.”

Berti Investments was set up in early 2011, with a £5m loan from the Bertha Foundation, to invest in innovative, growing, entrepreneurial businesses in the UK that focus on reducing carbon emissions. All profits made by Berti Investments will be reinvested.

The company recently launched its new Accelerator programme, delivered in partnership with James Caan’s Hamilton Bradshaw Impact Partners (HBIP). The initiative will annually select three low-carbon businesses with high impact and growth potential, and award them with six months of business support from HBIP and the opportunity to receive funding of up to £1m each from Berti Investments.

Applications for the Berti Green Accelerator close on 17 April 2012.

Read more about this story around the web:

Berti Investments >
Herald Scotland >
The Scotsman >
Real Deals >
Growth Business >
Greenwise >
AltAssets >

The Government’s cloud strategy has been estimated by some experts to have the potential to reduce public sector technology costs by some £12bn per year by 2020.

The news follows the announcement last month that Edinburgh-headquartered Ecometrica had received significant financial backing from Highgate Tech Fund, a leading investor in early stage software companies, to support the company’s ambitious growth plans.

Dr Richard Tipper, chief executive of Ecometrica, said: “We have invested significantly in our SaaS capabilities over the last 18 months and the G-Cloud programme is a timely recognition of the company’s expertise in the design and supply of such solutions. The team has a clear commitment to developing flexible and platform-independent solutions around the SaaS model and this award clearly recognises our capabilities across both the cloud and carbon accounting sectors.”

See this story around the web:

Software firm lands on procurement G-Cloud (Scotsman.com)

Read more about the UK Government’s G-Cloud Procurement Framework:

Cloud app store launches public sector IT buying revolution (ukauthority.com)

G-Cloud’s successful suppliers get Cabinet Office nod (Guardian.co.uk)

Carbon footprints can be measured by the amount of carbon dioxide or other carbon compounds emitted into the atmosphere by the activities of an individual, company and country. In 2007 the government launched the Carbon Reduction Commitment/Energy Efficiency Scheme, aimed at improving energy efficiency and cutting emissions in large public and private- sector organisations, which are responsible for around 10 per cent of the UK’s emissions. Whilst this scheme is not just about the management of carbon emissions releated to information and communications technology, an increasingly important question is how organisations of all kinds can reduce their carbon footprint while their digital footprints are getting bigger.

Read the full article by Aasha Bodhani of E&T, the magazine of The Institution of Engineering and Technology – featuring expert comment by Ecometrica Operations Director, Gary Davis – either online at the following link, or the full print article via PDF below.

Digital footprints are growing >

London, 11th January 2012 – The Highgate Tech Fund today announced that, after several months of detailed due diligence, agreement has been reached to close the third investment in Fund 2. Highgate Tech Fund (HGTF) has invested in Edinburgh-based company Ecometrica, a leading Greenhouse Gas Accounting and Ecosystem Mapping business providing Software as Service (SaaS) applications. Ecometrica are a team of leading greenhouse gas experts and the solution is already being used by some of the largest companies globally, including RSA, National Express and Petkim (Turkey’s largest petrochemical company). The Ecometrica solution, named ‘Our Impacts’, is a Carbon Disclosure Project (CDP) accredited web platform and is built on extensive research and content. ‘Our Impacts’ provides an easy to use carbon accounting system for all businesses that automates the calculation of greenhouse gas impact and enables them to identify areas for action or accurately calculate carbon offset.

Carbon accounting is rapidly becoming a requirement for many large and mid-sized companies around the world and is a pre-requisite for most Corporate Social Responsibility programmes. This trend was boosted by the recent Durban Agreement (12/2011), in which 190 countries committed for the first time to cut carbon emissions (individual country targets are yet to be agreed). This means that countries will need to impose reductions in carbon emissions on businesses within their country. One of the keys to cutting is to know how much carbon each business is emitting, ‘you cannot manage what you can’t measure’, is the famous quote (attributed to a number of people including Peter Drucker) or perhaps more accurately ‘what gets measured, gets done’ (attributed to Tom Peters). ‘Our Impacts’ enables businesses to measure their carbon impact and use accurate information to put strategies in place to reduce carbon output, or where reduction is not possible, offset their carbon impacts.

Ecometrica started life as a consultancy business in 2008 to provide GHG accounting and ecosystem monitoring services to FTSE 100, Fortune 500 businesses and governments globally. Recognising that this business model was not a scalable one, Ecometrica has developed a cloud-based solution that embeds many years of consulting expertise and knowledge, plus unrivalled data quality. The Highgate Tech Fund investment is part of a round of funding that will be deployed to grow global sales and marketing and for further product development.

Andrew Muir, Fund Co-Chair, said: “We are delighted to have made this investment. Ecometrica is a perfect company for our fund, with solid intellectual property, operating in a high growth market, demonstrating a clear proof of concept and some early stage, big brand customers already paying to use the product. We have identified Ecometrica as having the best potential to become a market leader in this space. Success will come from growing the customer base globally and adding new SaaS products to the portfolio.”

Richard Tipper, CEO Ecometrica, added: “We were impressed by the Highgate Tech Fund team, they have all succeeded in the software and technology space and the expertise that they bring to the table in addition to the investment gives us the confidence to accelerate the business to success.”

Highgate will take an active role in Ecometrica via a board seat and will use the inherent expertise of the fund team to work alongside the business to support success on an on-going basis. Highgate expects to make at least one more investment in Fund 2 before closing this fund to investors in April 2012.

-Ends-

Notes to Editors:

Highgate Tech Fund
Highgate Tech Fund 2 is the second fund from the combined team of Highgate Associates and Enterprise Corporate Finance. The Fund was founded by Andrew Muir and Ken Nelson both serial tech sector entrepreneurs with more than 25 years of experience successfully creating, building and exiting software and tech companies. Highgate Tech Fund was created in the government ethos of EIS to support investment in to early stage British based tech companies. Highgate Tech Fund invests in the best early stage software companies that have a need for investment to support fast track growth for an existing proven product. HGTF is also unique that it does not charge fees to investors and only makes money when companies within the fund make a successful exit and then only after 6% annualised has been returned to the investor. This ensures that the interests of the fund management team (all tech sector experts) are aligned with investors, unusual in the EIS and VCT Fund market. Highgate Tech Fund 2 opened in November 2010 and will close on April 4th 2012. The target is to have 4 or 5 good quality investee companies within the fund at that time.

www.highgatetechfund.com

About Ecometrica
Ecometrica is a company of world leading specialists and experts in greenhouse gas (GHG) accounting, ecosystem services, climate change policy, remote sensing and web based programming. With offices in Edinburgh, Scotland and Montréal, Canada, Ecometrica has unrivalled experience in the development and application of all major standards for GHG accounting, ecosystem change measurement and monitoring.

The mission is to make accounting for GHG emissions and ecosystem changes easier for all organisations, including business and government, by making our expertise available through a comprehensive range of web-based and professional consulting services. Whatever your business, we make greenhouse gas accounting and ecosystem measurement easier.

www.ecometrica.com

About Our Impacts
Our Impacts is the CDP-accredited greenhouse gas accounting service that brings together world-leading carbon experts and extensive research databases, all delivered through a flexible web-based platform. With its unique carbon calculation engine and full quality assurance process, Our Impacts is the natural choice for definitive, powerful and flexible greenhouse accounting.

www.ecometrica.com/our-impacts

Ecometrica Operations Director and Chief GHG Analyst Gary Davis spoke at the event, explaining how to set the scope and boundaries for carbon accounts and discussing how is it being done, how it could be done, and how it should be done.

You can see Gary’s presentation from the conference by using the link below.

This new Ecometrica paper explains the rebound effect in more detail, and discusses how it can be minimised.

Ecometrica and Brook Lyndhurst were commissioned to carry out a review of the CCF, with the aims of exploring the impacts of projects and identifying the factors which contribute to the projects‟ success. The review also explored questions around the potential of community projects to deliver behaviour change, emissions reductions and wider sustainability aims; the limits of what they can achieve; and how government can support them to do more.

The review methodology involved extensive qualitative research with a sample of 21 projects, and a quantitative carbon assessment of eight of these.

Use the links below to view the publications on the Scottish Government website:

Summary
http://www.scotland.gov.uk/Publications/2011/06/13142135/0

Main Report
http://www.scotland.gov.uk/Publications/2011/06/28142552/0

Appendices
http://www.scotland.gov.uk/Publications/2011/06/28142748/0

This report, authored by Ecometrica and commissioned by the Department for Transport (DfT), considers the potential to reduce the risk of ILUC by actions taken at a regional level, for example by a region with a country, a national government or an international body such as the European Union.

Follow this link to the DfT website to read the full report on Regional Level Actions to Avoid ILUC.