Carbon & energy newsletter 02/2021

The first carbon and energy newsletter of 2021 sees the UK finally leave the EU, which also brings our exit from the EU ETS and the commencement of the new UK Emission Trading Scheme. It is also a key year in terms of the fight against global climate change with the delayed COP26 taking place in Glasgow in November and the US set to re-join the Paris Agreement. The latest updates to UK carbon and energy legislation are summarised below:

UK ETS Commences

At the end of 2020 the government confirmed they will be replacing the EU ETS with a UK Emissions Trading System. As summarised in our previous newsletter, the scheme will be very similar to the existing EU ETS, with almost identical reporting requirements. Most current EU ETS participants will have already received their new UK ETS Permits, transferred directly across from the old scheme. A new reporting system is also being developed to replace the old ‘ETSWAP’ system. SLR has seen an early test version of the system and it should hopefully be a bit more user friendly than the old one!

ALC Report Submission Extension

As existing participants in the EU ETS will be aware, this year there is a requirement to submit a new Activity Level Change (ALC) Report along-side your annual emissions statement. The final report template has yet to be issued and, as a consequence, there has been an extension to the deadline for submission of this report until the end of June 2021. A draft format is available and can be used to prepare and check your calculations, but you will need to transfer the information into the correct format before submission.

Climate Change Agreements – Target Period 4 Reporting

CCA participants should now be gathering their 2019 and 2020 calendar year energy and production data ready to submit to the Environment Agency (EA) via your relevant sector association. Please submit your data as soon as possible, and ahead of the sector administrative deadlines, to ensure that your data is checked, processed, and submitted to the EA to meet the compliance requirements of the scheme. If you receive any queries on your data submission, please ensure a prompt response.

Climate Change Agreements – HMRC State Aid Form

For those CCA participants who complete the annual HMRC State Aid declaration (those where the CCL discount received exceeds €500,000 per annum per legal entity), a new UK reporting process is being introduced to replace this, as this process was previously based on EU regulations. Further details should be announced by the Government over the next few months. The deadline for submission of the declaration to HMRC is usually July of each year, and we anticipate a similar deadline for 2021.

BEIS - Industrial Energy Transformation Fund (IETF)

BEIS has launched a new competition window for the Industrial Energy Transformation Fund (IETF) on March 8 2021. This scheme is a competition to provide part-funding for grants (between 30-65%) towards the cost of energy and deep decarbonisation projects. Entries need to be compelling and complete in order to score highly and attract funding. Applications can be made for feasibility and engineering studies or for projects deploying technologies that improve the energy efficiency of industrial processes.

• For feasibility studies the minimal total eligible cost is £30,000 and for engineering studies £50,000.
• For project implementation the minimum eligible grant is £100,000 and the maximum is £14M

All applications for this funding window must be submitted by 11:00 on 14 July. After all applications have been received a decision will be made as to which applications get funded.

There will be a further window for funding later in the year.

CDP Submissions for 2021

If your organisation currently submits information to the Carbon Disclosure Project (CDP), or is thinking of doing so, the guidance documents for 2021 are now available. The deadline for disclosure is 28th July and it is worthwhile reviewing the latest reporting requirements now to ensure that you understand the information and data required for disclosure.

ESOS

We are currently in compliance period 3 of the Energy Savings Opportunity Scheme (ESOS). Although the reporting deadline of 5th December 2023 seems some way in the future, you can take action now and begin your programme of site auditing to meet the compliance requirements. You may be looking to identify energy reduction projects to feed into your carbon reduction targets or may simply wish to spread the costs of ESOS compliance, if so SLR’s carbon and energy team can undertake audits and provide assessments by accredited ESOS Lead Assessors.

SECR

Remember that if you are a ‘large enterprise’ and your company annual reporting period is January -December, you will need to include a statement of your annual energy use and carbon emissions under the Streamlined Energy and Carbon Reporting (SECR) regulations.

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.