Allowable ‘offset mechanisms’ for 100% renewable energy and carbon neutral goals

In an earlier blog post, we analysed two different targets, carbon neutrality and 100% renewable energy. In this blog post, we answer two customer questions about ways to offset typical emission sources, as well as displaying a summary table.

Can you offset your entire carbon footprint by purchasing renewable energy?

The short answer is no. It is possible for 100% of your electricity demand to be met by renewable energy. However, it won’t be possible to reach carbon neutrality solely based on an efficiency and renewables strategy.

This is because renewable electricity purchases can only be used to offset your electricity consumption and not to offset other emission sources like natural gas, diesel or petrol emissions, or supply chain emissions like paper consumption. For these emission sources, carbon offsets may need to be purchased until renewable energy alternatives are widely available.

You can read more about the differences between the energy and carbon footprint in this blog post.

Can you use LGCS to offset the electricity consumption from assets over which you don’t have operational control?

LGCs, or Large-Scale Generation Certificates are Renewable Energy Certificates, which certify that renewable energy has been produced. Every 1 MWh of eligible renewable energy generation creates 1 LGC. You can use LGCs to offset your electricity consumption and claim the renewable energy. You can buy LGCs indirectly by purchasing GreenPower®, by entering into a corporate PPA or buying LGCs through a broker.

LGCs can be used against your electricity consumption, but they can also be used to offset the downstream electricity consumption from assets over which you don’t have operational control. Examples of this would be the energy consumption of street lights in the case of councils or the energy consumption of an outsourced data centre.

Allowable offset mechanisms per emission scope
Figure 1: Allowable offset mechanisms per emission scope

You can purchase LGCs to cover your own electricity consumption plus additional ones for your outsourced assets and retire them on behalf of your outsourced provider. This decision is particularly important for the size of a potential Power Purchase Agreement.

Offsetting mechanisms for your typical emission sources

The following table helps to clarify which offset mechanism can be used against which emission source using the example of a National Carbon Offset Standard (NCOS)-compliant inventory. It also shows what emissions sources carbon neutrality and achieving 100% renewable energy relate to.

Allowable offset mechanisms for carbon neutrality and 100% renewable energy

Emission SourceUsing carbon offsets to ‘offset’Using LGCs (RECs) to ‘offset’Achieve carbon neutralityAchieve 100% renewable energy?
RefrigerantsYesNoYesN/A
Natural GasYesNoYesAchievable only with renewable fuels
Fleet Vehicles DieselYesNoYesAchievable only with renewable fuels
Fleet Vehicles PetrolYesNoYesAchievable only with renewable fuels
Fleet Vehicles EthanolYesNoYesAlready renewable
Fleet Vehicles BiodieselYesNoYesAlready renewable
Fleet Vehicles LPGYesNoYesAchievable only with renewable fuels
ElectricityYesYesYesYes
Electricity (Street Lighting)YesYesYesYes
Electricity consumption base buildingYesYesYesYes
Outsourced electricity consumption (e.g. data centres)YesYesYesYes
Water and sewerYesNoYesOnly if water/sewer provider is powered by renewables
PaperYesNoYesN/A
EquipmentYesNoYesN/A
Food and CateringYesNoYesN/A
PostageYesNoYesN/A
Taxis, Uber and other servicesYesNoYesOnly if third-party organisation has fleet powered by renewables
Employee commuteYesNoYesOnly if all employees’ commute is powered by renewables
Waste to landfillYesNoYesN/A
Green wasteYesNoYesN/A
Air travelYesNoYesOnly if planes are powered by renewables

If you would like to know more about the best strategy for your organisation to offset your emission sources given your unique circumstances, why not have an informal chat with Barbara or Patrick.

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