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Carbon and Energy Newsletter - November 2021

Graeme Precious Principal
Graeme Precious

Graeme has worked with high profile organisations in the public and private sector, ensuring compliance with energy and carbon legislation and managing the delivery of energy and carbon management programmes. He has experience in heading the delivery of carbon and energy compliance services in areas such as CRC, CDP, GHG Reporting, CCA, EUETS and ISO50001, working with blue-chip organisations. He has a thorough knowledge of UK carbon and energy legislation and significant experience of working with businesses to understand the impacts of energy and carbon emissions and the development of management strategies.

COP26 this month brought the urgent need to act on climate change into sharp focus, but also the difficulty in obtaining a consensus when it comes to global action. To coincide with COP26 the UK government published its own Net Zero Strategy, which lays out the key activities which will support the aim of achieving Net Zero by 2050. We have highlighted some of these actions below along with other carbon and energy related updates.

UK Government Net Zero Strategy

The strategy document laid out the key actions that will underpin the achievement of Net Zero by 2050 across all sectors including Power, Transport, Industry, Buildings and Natural Resources. At this stage much of this is laid out in principle with more detail to follow. Focusing on the Industrial Sector, below are the items that are likely to have a direct impact. The UK government has:

  • Pledged to fully decarbonise the Power Sector by 2035 through a mixture of: Renewables, Nuclear Power, Carbon Capture and Storage, and Hydrogen.
  • Pledged to support industry to switch to cleaner fuels, and to ‘future-proof’ industry through the Industrial Energy Transformation Fund (IETF), and by the provision of support for fuel switching to low carbon alternatives.
  • Stated that they will encourage decarbonisation of industry through the use of carbon pricing, and demand side measures such as product labelling, regulatory standards, and changes to public and private procurement approaches.
  • Proposed to investigate how existing schemes such as Climate Change Agreements (CCAs) can be enhanced and/or expanded.
  • Committed to exploring the potential to expand the UK Emissions Trading Scheme (UK ETS) to the two thirds of emissions currently not captured by the scheme. Potentially a huge expansion to the number of businesses impacted by this.

Further information can be found here.

New Mandatory Sustainability Disclosure Requirement

The Net Zero Strategy also stated an aim to introduce a new Sustainability Disclosures Regime (SDR), which will include mandatory climate related financial disclosures. The legislation confirming this is due to pass in April 2022, which would then make the UK SDR mandatory for certain companies. In-scope companies include: listed companies, banks, authorised insurance companies, large companies (500+ employees), and high turnover companies (£500m+/year).


As we are closing in on the end of the year, sites operating within the UK ETS should be reviewing their compliance activities for 2021. You should ensure that you have contacted your verifier to plan the annual verification process, and also check on the progress of your UK Registry application (reminders were issued recently by the EA regarding the registration process and you must have Registry access in place to complete your annual emission surrender by the end of April 2022).

UK Allowance prices have been trading at between £50-60/tonne recently. This is obviously a significant increase in the allowance price that most sites would have been paying in 2020-21 so it would make sense to check budgets with your finance departments!

SLR’s Carbon & Energy Management team can provide support in all of the above areas of carbon and energy reporting and management. If you need any assistance or require further information, then please get in touch.

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If you have any questions, or would like to discuss a project, our team would be happy to hear from you. Find out more