Department for Environment, Food and Rural Affairs
Greenhouse Gas Emissions Reporting draft regulations for quoted companies
Consultation response from BT
17 October 2012
17 October 2012
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Summary
1. BT supports Government mandating of Greenhouse Gas (GHG) emissions reporting for
quoted companies; it believes this will enable the Government to maintain board level
engagement to reduce energy consumption and GHG emissions, which are key to achieving
continued progress against the UK’s CO2 reduction targets.
2. BT also fully supports the Government position that the regulation does not require
companies to use the Government guidance, but does require that directors are transparent
over which methodology has been used.
3. It is critical that companies be allowed to use international standards such as the World
Resource Institute/World Business Council for Sustainable Development GHG Protocol, the
International Organisation for Standardisation (ISO) 14064-1 and the Climate Standards
Disclosure Board’s Climate Change Reporting Framework. Specifically, companies must not be
forced to quantify their Scope 2 using grid average conversion factors; they should be allowed to
report the actual carbon figures specified within their energy supply contracts. This will create
an incentive for large businesses to demand renewable energy from their suppliers, as they will
be visibly reporting renewable energy purchase, thus stimulating an investment in additional
renewable energy availability.
4. We support the view that regulations should come into effect at the same time as the BIS
regulations, which is likely to be for reporting years ending after 1 October 2013.
5. BT supports the inclusion of all large companies in this regulation. We welcome a
Government review of the first two years of reporting by quoted companies in 2015 with a view
to making a further decision in 2016 on whether to extend the reporting requirement to all large
companies.
6. Furthermore, there currently exist several overlapping policy instruments in the UK such as
the Climate Change Levy (CCL) and Carbon Reduction Commitment (CRC), which prevent
business from adopting a simplified approach to reporting publically on GHG emissions and
energy consumption. BT proposes the below solution to this simplification challenge so that
mandatory GHG reporting could be adopted in a way that is easy to understand, and would
reflect the true carbon dioxide equivalent (CO2e)content of electricity that an organisation
generates or purchases.
BT’s proposal in detail
7. We believe the Government’s carbon emissions reduction goals could be supported if more
companies made a commitment to source renewable and low CO2e energy from suppliers.
Energy suppliers would thereby be encouraged to invest in greater capacity to fulfil this
demand.
8. One-way to help stimulate the creation of a clear market for renewable and low CO2e energy
would be to introduce an A-to-G colour-coded label on all electricity sold in the UK. Such a
system has worked successfully in driving low carbon purchasing decisions in other markets such
as white goods and vehicles.
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9. An electricity label would provide consumers and companies with an easy and visible way to
identify the CO2e content of the electricity they purchase, and would remove double counting of
renewable energy as it would be based on one transparent standard. This would remove
confusion surrounding green tariffs, and make the CO2e emissions of different energy suppliers
and products more transparent to consumers. It would create an opportunity to combine the
Climate Change Levy (CCL) and Carbon Reduction Commitment (CRC) into a more visible and
easily understood A-to-G carbon levy, as is currently the case for A-to-G labelling on vehicles.
10. We believe that consumer and commercial ‘demand-pull’ for renewable energy could play a
key role in stimulating long-term investment from major energy companies to increase the
supply of renewable energy in the UK. In order to assist this stimulation, the Government must
incentivise both demand and supply sides of the market. We recommend the following changes
within the Electricity Market Reform:
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the CRC and CCL are merged with the Carbon Floor Price, with the CRC allowance
cost paid to the energy suppliers in the same way as the current CCL
the price of carbon in the simplified scheme would be designed to ensure that there
is no reduction in revenue to the Exchequer
the levy on electricity would be banded according to its carbon content. Tracking
systems such as those used on the continent would be used to track the generation
of electricity and its associated carbon content, ensuring a straightforward scheme
that avoids the risk of double counting of CO2e emissions by removing the grid
average and replacing the current numerous renewable energy certificates with one
recognised standard.
11. Consumers would purchase electricity that is backed by the CO2 label, giving the option to
purchase from a low carbon source of electricity, and businesses would report on CO2 emissions
using the emission factor on their CO2 label. This would bring into play the consumer market pull
for generators and suppliers to generator more low carbon electricity.
12. BT believes that Government’s current review of energy and carbon policy, alongside
productive dialogue with business, represents an excellent opportunity for Government to
develop a simplified energy and carbon policy framework that will also enable the UK to meet
its commitments to carbon reduction.
13. As always, BT would be happy to discuss its proposals with officials in more detail if that
would be helpful.
We would be happy to discuss these issues further. Further enquiries can be directed to
David Pincott, Head of Political Research, Policy and Briefing, BT Group plc
Tel: 020 7356 6585/email: david.pincott@bt.com
17 October 2012
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