DEFRA Launch Consultation on GHG Guidelines

The UK’s Department for Food and Rural Affairs (DEFRA) has recently launched a consultation on how renewable electricity, biogas and biomethane (Biogas which has been treated to allow injection into the UK’s gas distribution grid) are reported.

This might sound like something only sustainability reporting enthusiasts (like those of us here at Ecometrica) might get excited by.  However the suggested changes aim to improve the connection between the actions organisations take to reduce their environmental impact and how this is reported.  For instance DEFRA suggests that the revised approach to reporting might lead to an improved uptake in either renewable energy contracts – where your electricity supplier sets your usage against the electricity they generate from renewables – or further investment in on-site renewables  by individual organisations.

DEFRA’s 2009 reporting guidelines where updated in 2013 in a number of ways, not least to reflect the introduction of Mandatory Carbon Reporting for listed companies in the UK. However, DEFRA didn’t update the approach for reporting renewable emissions and is now seeking views of interested parties on how best to report greenhouse gas emissions from renewable sources.

Broadly the ‘old’ guidance required all emissions from electricity or gas use to be reported using the same emissions factor known as the ‘grid average’.  This is a location based approach and was applied:

• To avoid double counting – if a business installs a grid connected wind turbine and reports a lower emissions factor in theory every other organisation reporting emissions from electricity should report a higher ‘grid average’ emissions factor. In practice this doesn’t happen so everyone is required to report using the same figure.

• To reflect the lack of regulation around electricity and gas purchasing contracts.

The main change being suggested is allowing emissions to be reported on a market basis – effectively allowing organisations to reflect the contractual basis for purchasing renewable electricity or gas (or carbon offsets which meet specific criteria also set out by DEFRA).  The new guidance aims to deal with the double counting issue by still asking reporting organisations to show electricity and gas emissions in a gross format reflecting the ‘old’ guidance.

Under the suggested guidance avoided emissions can be reported separately and reflected in a lower total emissions figure.  Avoided emissions include:

• Electricity generated on-site and exported to the grid (this would include Biomethane)

• Good quality Carbon Offsets¹  – purchased & retired

• Woodland Carbon Units – purchased & retired

• Purchased Renewable electricity or certified grid-injected biomethane

DEFRA is asking interested parties to give their views on two options:

1. Gross/Net

A total figure is reported using the location based reporting approach and actions to avoid emissions (see list above) are then netted off against this gross figure. Both gross and net figures are reported.

2. Gross/ Gross

Two gross total figures are reported, one for a location based approach the other for the market based approach.

This is a relatively complex area of the reporting guidelines and we would recommend seeking advice if you are unsure how the amended guidance might affect how you report your greenhouse gas emissions.

At this stage we would suggest two next steps:

1. 1. If you have an opinion on the best  of the two options suggested by DEFRA then respond to their survey. Their explanation and supporting documentation can be found here:  https://consult.defra.gov.uk/climate-change/ac04ad33

   2. Consider how well suited the tools you use to collect and report data are to the new reporting regime.  We would of course recommend considering Ecometrica Sustainability sustainability management software to assist in managing these increasingly complex reporting requirements. In fact Ecometrica Sustainability already complies with either of the options set out in the DEFRA consultation.

¹  The description of Good Quality Carbon Offsets from the 2009 DEFRA guidance still applies.  Refer to Guidance on how to measure and report your greenhouse gas emissions(2009), Annex G, p50