Implementing the Carbon Trust Standard

[Derek_Parkinson]

The benefits of implementing the Carbon Trust Standard are both short and long term. In this article we will look at how it helps companies subject to the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), and sets them on the right track in their emissions reduction efforts. We will also look at areas where difficulties are likely to arise in implementing the standard and how these might be tackled.

The Standard is one of two designated Early Action Metrics in CRC, and is likely to bring two main benefits to those who implement it – reductions in the cost of participating in the scheme, and a higher place in the CRC league table, reducing the risk of damage to a company's reputation.

CRC requires all participants to buy enough allowances to cover their emissions at a rate of £12 per tonne of CO2 in the first phase, the money being paid back to participants in amounts that vary according to their rank in the league table. For the first year of the scheme the Standard accounts for 50% of the points awarded, falling to 20% in year two, and 10% in the final year.

Low Carbon Board Report has learned from a reliable source that the Environment Agency – the government body responsible for implementing CRC – will adjust the points system so as to reward companies that achieve the Standard earlier rather than later in 2010-2011. But whatever the final form of the points allocation system, we know that those achieving the highest positions in the league table will save up to 10% of the cost of allowances.

Challenging but achievable

So, what must companies do to achieve the Standard? The actions required fall into three main categories:

- Participants must measure their carbon footprints accurately, including emissions from all specified sources
- Absolute reductions in the carbon footprint, or an equivalent efficiency improvement must be achieved
- Carbon management, including governance, accounting, reduction methods and targets of a company must be shown to meet required standards

At present the second of these is unlikely to be top of the agenda for companies that are taking their first steps on the journey towards implementation. The other two are likely to be more pressing concerns. Collating the data needed for the first requirement could be a significant challenge for some companies, not because they don't possess it, more likely because it will be distributed across different systems and business units.

“The energy data – for gas and electricity, for example – should be available in any reasonably well organised company. It means three years of energy bills,” says Sue Spilsbury, a consultant working with RWE npower. “I think the biggest issue for a lot of companies will be the requirement for transport data. For the first application companies will only have to calculate the footprint data for vehicles they own, but further down the line it will cover transport they use – and that includes road, rail and air. Some of the data you need should be in your systems for claiming travel expenses, but those systems aren't set up for this purpose, and they're separate from those for your energy bills,” she says.

Difficult it may be, but tackling transport emissions is essential if we're serious about moving to a low carbon economy, emphasises Harry Morrison, General Manager of the Carbon Trust Standard Company, tasked with overseeing the scheme. “Yes transport is more challenging, but transport is a key part of an organisation's footprint, it is the direct responsibility of an organisation, and it is also a key part of the UK footprint as a whole.”

“And it is achievable – we know this because of the 250 organisations that have passed the Standard in the last two years. From the feedback we have received from businesses we know that it is important to tackle transport emissions. It is achievable, but it is challenging, and that's what it is supposed to be,” he says.

Policy, process, plan

Striking the right balance between what is achievable but sufficiently challenging is a tough task, and for some observers it is not quite right yet. Emissions from outsourced transport operations are not included for companies in the first year of the scheme, notes Chris Harrop, Director of Sustainability at Marshalls, a landscape materials company that has already been accredited. “Could some companies outsource their transport operations to make achieving the Standard easier? It's important for CRC to drive the right behaviour,” he says.

Marshalls uses route-planning software for all its road haulage operations, whether vehicles are owned or not, but company cars can add complexity he says. “You may have some people who use a fuel card, and others that opted out, so then you have to get the data from two sources. This may drive changes in the company – it might get to the point where you say to staff that they have to use a fuel card,” he says.

Other changes may involve new ways of seeing and thinking about existing data and processes, suggests Delvin Lane, Head of Energy 360, an arm of British Gas aiming to exploit the market opportunities created by CRC. “We're finding that often the data is there but it's difficult to get. We're also finding that organisations often have a plan in place that is relevant – they have the basics of a carbon management plan – but they don't realise it. An example is a public sector organisation we've been working with – they're trying to cut costs, so they have a budgetry plan. But it can be adapted to be a carbon management plan,” he says.

It's important not to get side-tracked into minute levels of detail with the carbon management plan, suggests Chris Harrop of Marshalls. “It is quite woolly, and you could go overboard with it. But what you basically need to show is that you have a policy in place headed by someone at a senior level, and processes for putting it into practice.”

Overall, Harrop is in no doubt that implementing the Carbon Trust Standard has been worth the effort for Marshalls. “There are two basic reasons why I thought we should do it – the methodology helps you understand your business better, and of course it improves your scores in CRC.”


Key questions:

- Have we analysed the risks of a poor ranking in the league table?
- Have we reviewed our transport policies and processes?
- Do we have the ingredients of a carbon management plan?