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What you need to know about the new Climate Active electricity carbon accounting rules

Are your electricity-based emissions zero because your business is based in the Australian Capital Territory, which buys 100% renewable electricity? Can you deduct the export from your 150 kW system from your electricity emissions? Can you claim the renewable energy proportion of your grid supply? Is the electricity that is being generated from your 99 kW solar system emissions-free, even though you availed yourself of the STC discount? Are your emissions from electricity zero because you just entered into a 100% renewable energy Power Purchase Agreement? Can you deduct GreenPower® purchases from your electricity emissions?

While there are no clear frameworks (other than the GHG Protocol) on how to properly account for electricity-based emissions and their reductions in some countries, we are in a much better position in Australia.

Here, we have the mandatory Renewable Energy Target, which provides the framework for Renewable Energy Certificate creation, and we have a mandatory (NGER) and voluntary (Climate Active) reporting system for emissions.

Climate Active has recently released guidance on how to account for electricity-based emissions and reduction measures, allowing you to get recognition for your renewable energy projects.

The Clean Energy Regulator, which administers the NGER system, is also consulting on the design of a new Corporate Emissions Reduction Transparency report (CERT). If you are a large emitter reporting under NGER, you will be able to show how you are meeting your emissions reduction goals.

Let’s have a look at the new Climate Active rules for accounting for electricity emissions and reduction measures.

New Climate Active rules for carbon accounting for electricity

The Climate Active team recently released a set of rules which are based on best-practice principles in the Greenhouse Gas Protocol Scope 2 Guidance and stakeholder consultation. The new framework applies to annual Climate Active reports from calendar year 2021 and financial year 2020/21 onwards.

One of the most significant changes is that you now need to report both your location and market-based electricity emissions, which is called ‘dual reporting’. If you are reporting under CDP, you will be familiar with this concept.

You must use dual reporting for Climate Active organisation, simple service, building, precinct and event certifications, while you can choose to use a dual reporting method for  product and complex service certifications. You can select either the location- or market-based approach as the primary electricity accounting method, which will determine the number of offsets required to go carbon neutral under Climate Active.

Location- and market-based approach to accounting for electricity emissions

In carbon accounting, one of the most important and largest sources of emissions is the consumption of electricity, which is accounted for under scope 2.

According to the Scope 2 Guidance of the GHG Protocol, there are two distinct methods for scope 2 accounting, which are both useful for different purposes. The methods used to calculate and report scope 2 emissions impact how a company assesses its performance and what mitigation actions are incentivised. When used together, they can provide a fuller documentation and assessment of risks, opportunities and changes to emissions from electricity consumption over time.

The location-based method

This method reflects the average emissions intensity of the grid, based on your company’s location. This method allows you to calculate emissions that you are physically emitting to the atmosphere. So, if your business is located in the ACT, which is 100% renewable, you will still have to apply the NSW grid’s emissions factor, as you are getting your electricity from NSW power plants. The location-based method does not allow for any claims of renewable electricity from grid-imported electricity use.

The only way you can reduce electricity emissions using the location-based method is to site your business in an area where the electricity from the grid has lower emissions (e.g. Tasmania, or New Zealand), to reduce your electricity consumption, or to install behind-the-meter renewable energy systems. Buying renewables will not be recognised under the location-based method.

The market-based method

The market-based method reflects the emissions that you are responsible for from the electricity you purchase, which may be different from the electricity that is generated locally. This method derives emission factors from contractual instruments, such as the purchase of GreenPower®, RECs/LGCs, or bundled renewable energy power purchase agreements. It uses a ‘residual mix factor’ (RMF) to allow for unique claims on the zero-emissions attribute of renewables without double-counting.

Under the market-based approach, you can reduce your electricity-based emissions by being more energy-efficient, by installing onsite renewables and shifting your electricity supply to renewables.

You can choose which method total – market-based, location-based or both—to use for performance tracking and must disclose this in your inventory.

The following sections go through the details of how to treat onsite generation, the export of renewables, the treatment of renewable energy certificates, the purchase of renewables and carbon-neutral electricity.

Treatment of Renewable Energy Certificates

Renewable Energy Certificates consist of Large-scale Generation Certificates (LGCs), from solar PV systems greater than 100 kW, and Small Technology Certificates (STCs), from small-scale solar PV systems of less than 100 kW.

One renewable energy certificate equates 1 MWh of renewable energy generation. You can find more information about these certificates in this blog post.

You can use LGCs to reduce reported electricity emissions under the market-based method, but not STCs.

Market-based method

  • You can use LGCs as a unique claim on the zero-emissions attribute of renewable generation within a Climate Active carbon account (meaning you can deduct retired LGCs from your electricity emissions).
  • You can only use LGCs to account for electricity-based emissions, e.g. direct grid-based electricity (scope 2) or indirect emissions sources (scope 3) consisting entirely of electricity, such as third-party operated data centres, or streetlighting.
  • You must retire LGCs on the Renewable Energy Certificate Registry, with evidence of their retirement, including serial numbers, provided to Climate Active.
  • You should directly retire LGCs in the name of the claimant, for example, ‘Retired on behalf of Company X for 2020 Climate Active carbon-neutral claim’.
  • You may retire LGCs indirectly on behalf of the claimant, for example, by GreenPower®. You should provide serial numbers to Climate Active.
  • In instances where you cannot provide discrete LGC serial numbers, Climate Active may consider accepting other evidence that LGCs have been retired, for example, certificates provided by an electricity generator or electricity bills listing accredited GreenPower® usage.
  • LGCs must have an issuance date of less than 36 months from the end of the reporting year; for example, a calendar year 2020 report (ending 31 December 2020) could use LGCs with an issuance date of no earlier than 1 January 2018.
  • You cannot use STCs to make renewable energy emission reduction claims for grid imported electricity consumption.

Location-based method

  • Neither LGCs nor STCs can be used to make renewable energy emission reduction claims for grid-imported electricity consumption.

Renewable Energy Target

The Renewable Energy Target (RET) is a legislated scheme designed to reduce emissions from the electricity sector and incentivise additional electricity generation from sustainable and renewable sources. The RET consists of two different schemes: the large-scale renewable energy target (LRET) and the small-scale renewable energy scheme (SRES). Your can account for your investments in the LRET under the market-based method.

Market-based method

  • The percentage of electricity consumption attributable to the LRET, as reflected by the Renewable Power Percentage, for a given reporting year, is assigned an emission factor of zero in the carbon account. For example, a business using a total of 1,000 MWh of electricity in 2019, lists 186 MWh as zero emissions (1,000*18.6% (RPP for 2019)).
  • This deduction is not available to you if you are exempt from the LRET (i.e. Emissions Intensive Trade Exposed Industries).

Location-based method

  • There is no separate accounting treatment for the LRET as it is already included in the state emissions factors.

GreenPower®

GreenPower® is an easy way to switch your electricity supply to renewables that are additional to the Renewable Energy Target. If you need more information on how GreenPower® works, please read the GreenPower Guide for Businesses we developed for the GreenPower® program.

You can also obtain accredited GreenPower® under your renewable energy PPA. For more information, please read our GreenPower® PPA blog post.

You can account for your GreenPower® purchases using the market-based method.

Market-based method

  • Accredited GreenPower® usage is assigned an emission factor of zero in your carbon account, regardless of the state in which you are using GreenPower®.
  • GreenPower® use in excess of what is required to account for your direct electricity usage may be used to reduce your other indirect entirely electricity-based emissions (e.g., data centre usage, streetlighting).
  • GreenPower® use in excess to what is required to account for your entire electricity usage cannot be used to offset other non-electricity emission sources in your carbon account (such as, for instance, emissions from your fleet).

Location-based method

  • You cannot use GreenPower® purchases to make zero-emission electricity claims under the location-based method.

Renewable energy Power Purchase Agreements

Renewable energy Power Purchase Agreements (PPAs) are a great way to cost-effectively increase the renewables proportion of your electricity supply. They also allow you to switch your entire electricity to 100% renewables, thus bringing your electricity-based emissions to zero. However, just like with LGCs described above, you need to retire LGCs associated with your PPA to be able to claim the emissions reduction and renewable energy generation.

Market-based method

  • You need to retire LGCs above any mandatory LRET obligations to claim zero emissions for your electricity consumption.
  • Where you cannot be listed on the REC Registry, you need to supply other evidence to the Climate Active team from the retiring body, such as certificates from the electricity provider.
  • You cannot use supplier-specific emissions factors.

Location-based method

  • You cannot use retired LGCs, including under PPAs, to make zero-emissions claims under the location-based method.

Local renewable energy generation

One of the best ways to reduce electricity consumption other than reducing your consumption is to install solar panels or other renewable energy generation systems where your circumstances allow it. If you directly consume electricity from a renewable energy system, it is called a ‘behind the meter’ system.

You can account for behind-the-meter use of renewable generation systems under both the location- and the market-based method. However, you can only account for exported electricity under the market-based method.

Market-based method

  • Behind-the-meter use of electricity from large scale systems may be reported and assigned an emissions factor of zero in your carbon account, only if you retire any LGCs associated with that generation or not create any. An example of when you don’t create any LGCs is when you install a large-scale system, and you choose not to generate any LGCs.
  • If you are creating and selling LGCs, you must treat behind-the-meter usage from large-scale systems the same as electricity consumption from the grid (that is, treated as residual electricity).
  • You may report and assign behind-the-meter use of electricity from small-scale systems an emissions factor of zero in your carbon account, regardless of whether you have created, transferred or sold any STCs associated with this generation.
  • You need to convert exported electricity from renewable systems into an emissions reduction equivalent and net from gross emissions. You can achieve this by multiplying exported electricity by the national scope 2 electricity factor only (to account for transmission losses) for the year of the generation. You must retire any LGCs or not create any. You don’t need to retire any STCs associated with this generation.

Location-based method

  • You may report behind-the-meter use of electricity from large scale systems as zero emissions in your carbon account, provided you retired any LGCs associated with that generation or did not create any.
  • If you create and sell LGCs, you must treat behind-the-meter use from large scale systems the same as electricity consumption from the grid.
  • You may report behind-the-meter use of electricity from small-scale systems as zero emissions in your carbon account, regardless of whether you have created, transferred or sold any STCs associated with this generation.
  • Under the location-based method, you can’t use exported electricity as a reduction in electricity emissions.

Jurisdictional renewable energy targets

Market-based method

  • If you are operating in a jurisdiction where the government retires LGCs (such as, for instance, in the ACT), you can claim the corresponding percentage of emissions impact on your electricity consumption as zero, provided that the LGCs are retired on behalf of the jurisdictions’ citizens and the claim is auditable for the given reporting year.

Location-based method

  • There is no separate accounting treatment, as the emissions benefit is already included in the state factors used to convert electricity consumption into its emissions equivalent.

Climate Active certified carbon-neutral electricity

Market-based method

  • You can convert Climate Active certified carbon neutral electricity into its emissions equivalent and deduct it from the gross carbon account offset liability.
  • You can convert by applying the relevant emission factor for the particular brand of carbon-neutral power.

Location-based method

  • Same rules

Grid-imported (residual) electricity

Market-based method

  • You need to convert electricity usage not matched by zero-emissions electricity attribute claims (residual electricity) into t CO2-e using the RMF according to the below formula: RMF = National EF / (1 – RPP) RMF (residual mix factor), EF (emission factor), RPP (renewable power percentage), e.g. in 2019, the RMF equals: = 0.88 (national scope 2 and 3 EF)/ 0.814 (18.6% RPP) = 1.08 Financial year reports will use the average of the RMF across the relevant calendar years, reflecting the RPP of each 6-month period. While this sounds complicated, Climate Active have electricity calculators that help with calculating the associated emissions.

Location-based method

  • You need to convert electricity use in each state of your operations into t CO2-e using the relevant state NGA factor (either scope 2 and scope 3; or the full fuel cycle factor).
  • The emissions factor used should correspond to the reporting year where possible, i.e. a 2018 reporting year should use the 2018 NGA factors.

If you are interested in the development of a Climate Active carbon inventory for your organisation that takes into account scope 3 emissions and properly accounts for electricity-based emissions/reductions, please consider contacting us. Two of our staff are registered consultants with Climate Active, and we can guide you through the process of achieving certification or developing a Climate Active-ready carbon inventory. If you would like more information, please download our Climate Active brochure, or contact Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

NSW as a renewables superpower and what must be done to reach net-zero emissions [with video]

Last week, I presented on ‘NSW as a Renewables Superpower and What Must Be Done To Achieve Zero Carbon Emissions’ at the 13th Energy Storage World Forum Virtual Conference.

You can watch a 15-min-video of my presentation here, which includes information about the newly released New South Wales Electricity Infrastructure Roadmap:

What is Australia’s emissions trend?

At the moment, Australia is emitting roughly 530 million tonnes of carbon emissions annually. Please see below Figure 1, which shows Australia’s historical emissions. To put this into perspective, it means that every year, each Australian resident is responsible for about 21 tonnes of emissions. This is roughly four times higher than the global average of about 5 tonnes.

Australia's historical emissions (Source: Quarterly Update of Australia's National Greenhouse Gas Inventory | National inventory total, year to June 2000 to year to March 2020)
Figure 1: Australia’s historical emissions (Source: Quarterly Update of Australia’s National Greenhouse Gas Inventory | National inventory total, year to June 2000 to year to March 2020)

What is interesting to see in this graph is that our emissions in 2020 are about on the same level as they were in 2000. Is this good enough? Let us have a look at global emissions.

Where are we now and where do we need to be?

Despite the increased focus on climate change in the last few years and the milestone Paris Agreement, global greenhouse gas emissions have not reduced, and the emissions gap between where we should be and where we are is larger than ever. The main driver of long-term warming is the total cumulative emissions of greenhouse gases over time. In the past decades, greenhouse gas emissions have been increasing.

Due to all historical and current carbon emissions, global temperatures have already risen by about 1°C from pre-industrial levels. Continuing with business as usual could result in a temperature increase of over 4°C.

If all countries achieved their Paris Agreement targets, it could limit warming to roughly 3°C. However, to limit warming to 1.5°C, current Paris pledges made by countries are not enough.

Carbon emissions need to decline at a much steeper rate in the near future and reach net-zero by mid-century to have a chance of keeping warming to below 1.5°C. Please see Figure 2 below.

Global warming projections
Figure 2: Global warming projections

Australia has committed to a 26-28% GHG emission reduction by 2030 from 2005 levels. This is not ambitious enough for a 1.5-degree pathway. Also, as a country, we have not committed to net-zero emissions by mid-century, which is where we need to be. However, all states and territories have committed to this target, which effectively means that Australia has a net-zero target.

With most of Australia’s major trading partners having now committed to a net-zero emissions target by around mid-century, and with a new US President-elect who seems likely to increase America’s climate ambitions, perhaps the Australian Government will eventually follow suit. We’ve heard in recent days that the Government may abandon plans to use Kyoto carryover credits to meet its targets, which is a good start if true.

Australia's commitments, 100% Renewables
Figure 3: Australia’s commitments, 100% Renewables

We will see what happens with our national emissions targets in time.

Let’s have a look at Australia’s emissions projection. Under 2019 projections, we will end up with 500m tonnes of carbon emissions in 2030, some 30m lower than our current levels. Under our Nationally Determined Contribution to the Paris Agreement, we need to reach a 26-28% reduction by 2030. This is not anywhere near where we need to be to keep temperature increase to safe levels.

Australia's emissions projection (Source: Australia's emissions projections 2019, Department of Industry, Science, Energy and Resources)
Figure 4: Australia’s emissions projection (Source: Australia’s emissions projections 2019, Department of Industry, Science, Energy and Resources)

However, the good news is that even without policies and targets, the renewables share of electricity will grow, because we have reached the point where renewables are cheaper than fossil fuels.

For many years, we have not done enough. Now, we need to catch up on the years in which we have procrastinated. And rapidly.

NSW as the new renewables superpower

In March this year, the NSW Government released the Net Zero Plan Stage 1 and the Electricity Strategy. NSW officially committed to a 35% reduction in emissions by 2030 and to reaching net-zero by 2050. The focus of the plan is on emissions reduction across key sectors, such as energy, transport, waste, agriculture, mining and carbon finance. The net-zero plan and the electricity strategy will create thousands of new jobs and billions of dollars in new generation and transmission investment in NSW, mostly in regional areas.

A few days ago, the NSW Electricity Infrastructure Roadmap was released, which will establish NSW as a renewable superpower through a coordinated approach to transmission, generation and storage of renewable energy in the State in the coming decades.

NSW's plan to achieve net-zero by 2050
Figure 5: NSW’s plan to achieve net-zero by 2050

Over the next 15 years, four of the five NSW coal power stations are expected to close. These four power stations account for three-quarters of NSW’s electricity supply! As you can see in Figure 6, the closed power plants will leave a gap in electricity generation.

The exciting news is that this gap will be filled by renewable energy generation. NSW will develop several Renewable Energy Zones, enabled by a Transmission Development Scheme, which will have a combination of solar, wind and pumped hydro generation. The infrastructure needed to replace power stations has long lead times, and the Central-West Orana is the first pilot REZ that is currently being developed. Central-West Orana, New England and the South West Renewable Energy Zones will contribute 12 Gigawatts of generating capacity and 3 Gigawatts of firm capacity by 2030, and even more over the long term.

Scheduled coal plant closures and Renewable Energy Zones (Source: AEMO, 2020 Integrated System Plan, July 2020)
Figure 6: Scheduled coal plant closures and Renewable Energy Zones (Source: AEMO, 2020 Integrated System Plan, July 2020)

These renewable energy zones will contribute greatly to grid decarbonisation, which means that over time, the electricity we consume will increasingly come from renewables rather than fossil fuels.

However, this transition will take time. And we can’t rely on governments doing all the work. Everyone needs to act, countries, companies and communities. So, what can you do in your organisation and as an individual to track towards zero emissions?

To answer this question, we first need to take a look at where our emissions are coming from.

Where do our emissions come from?

The biggest part of our emissions is electricity generation, which at the moment comes mostly from fossil fuel power plants. The next most significant contribution is stationary energy consumption, such as burning natural gas. The next highest contributor is transport, which is driving cars, moving goods in trucks, and flying, for example.

Emissions contribution by sector (Source: Quarterly Update of Australia's National Greenhouse Gas Inventory | Figures and Tables for the March Quarter 2020 )
Figure 7: Emissions contribution by sector (Source: Quarterly Update of Australia’s National Greenhouse Gas Inventory | Figures and Tables for the March Quarter 2020 )

Fugitive emissions are mostly methane emissions lost to the atmosphere during coal and gas mining activities and transporting gas. Industrial processes and product use emissions come from industrial activities which are not related to energy, such as cement & lime, metal and chemicals production, as well as from hydrofluorocarbons used as refrigerant gases and other synthetic gases.

Agriculture emissions come from fertiliser usage and growing animals such as sheep and cows. Bill Gates has said that if cattle were a country, they would sit behind China and the US in greenhouse gas emissions.

Waste emissions come mainly from the decomposition of waste in landfill, whereas LULUCF emissions are land-use and land-use change and forestry. In Australia, these emissions are negative, as they are a carbon sink.

What can we do to reduce our emissions to net-zero?

The emissions reduction task is a combination of a small number of significant measures that are happening to reduce the emissions of primary inputs to goods and services, and the actions that individual businesses and consumers can take to reduce their carbon footprint.

There is some heavy lifting that happens independent of consumers.

Heavy lifting that happens independent of consumers
Figure 8: Heavy lifting that happens independent of consumers

Grid decarbonisation

The most prominent example is grid decarbonisation or the ‘greening of the grid’. Coal-fired power plants are being replaced with renewable energy in all Australian states. Just this week, Victoria announced $540million in the budget to develop six renewable energy zones, and Tasmania wants to be 200% renewable by 2040.

Green hydrogen

There is also a big push for green hydrogen in nearly every State, which could potentially replace natural gas over time. The NSW Net Zero Plan is aiming for hydrogen to supply up to 10% of current natural gas demand by 2030.

Biomethane

Biomethane is gas being produced from renewable sources, rather than extracting natural gas.

Reforestation

Reforestation means planting more trees, which reduces carbon dioxide in the atmosphere.

Green steel

Green steel is made by using hydrogen, rather than coal, to strip the oxygen out of iron ore. The by-product is water rather than carbon dioxide. At this time, ThyssenKrupp plans to build a 1.2 million tonne per annum green steel plant in Germany by 2025.

Methane reduction

Cows produce a lot of methane, which can potentially be reduced by up to 80% by introducing seaweed into their feed, based on research being led by CSIRO.

Waste management

One of the ways we can deal with the waste problem is to treat the waste as a resource in waste-to-energy plants.

Sequestration of fugitive emissions

Sequestration of emissions resulting from the extraction and production of LNG is a significant challenge but one which will hopefully improve in coming years.

Most businesses and consumers will benefit from these upstream and downstream changes in terms of their carbon footprint. But rather than rely solely on these changes, some of which may take decades, business and individuals can act themselves to reduce their carbon footprint faster.

What emission sources can you influence?

Every day, you are consuming electricity, and most of you probably use natural gas as well, whether for industrial process heating, air conditioning or cooking. Everyone needs to get from point A to B. Sometimes, we use our cars, sometimes we fly. And we transport our goods using trucks, ships and trains. Everyone consumes goods and services daily, and our consumer choices influence emissions. And we all produce waste.

So how can we reduce our emissions to net-zero?

Achieving zero carbon emissions from a consumer’s perspective

  • Be more energy efficient – we can we more energy efficient, for instance by turning off equipment when it’s not needed, or by replacing old, inefficient equipment, with new, energy-efficient ones.
  • Install solar – where we can, we should install solar. It reduces our emissions immediately, and it is cost-effective. And in future, battery storage will be more cost-effective as well, which will allow us to scale up our solar ambition and take more control over our energy supply and risk.
  • Buy renewable energy – we can choose where the electricity we are buying comes from. We can consciously choose to purchase renewable energy. Bigger organisations can do that via Power Purchase Agreements; smaller consumers can elect to procure GreenPower®.
  • Sustainable transport – we can buy efficient, low- and zero-emissions vehicles and implement EV infrastructure such as charging points. Even bigger trucks can be electrified, which you can see in these pictures here. Using video conferencing also helps to reduce emissions.
  • Less waste – we can reduce our emissions from waste simply by consuming less, by recycling more and by fostering a circular economy, in which the waste of one organisation can be a resource for another business.
  • Sustainable procurement – we can make more sustainable buying decisions and purchase carbon-neutral products, or products that were made from renewable sources, that can be recycled, or composted.
  • Go carbon neutral – on our journey to net-zero, we can invest in carbon offsets to finance projects that support emissions reduction or sequestration.
  • Leadership and governance – and perhaps most importantly, we can show leadership. We can implement all the solutions I’ve talked about earlier and then share our stories with others so that they can learn from our experience. Don’t’ be a follower, be a leader or at least a fast follower.

A challenge for you

I’d like to challenge you today to rethink your carbon footprint. Both your own and the one of the organisation you work for.

Here is my challenge to you:

  1. Switch your electricity supply to 100% renewable energy if you can
  2. Walk and cycle more. It will be good for your health!
  3. Consider a more sustainable diet

 

100% Renewables are experts in helping organisations develop their climate action strategies and plans, and supporting the implementation and achievement of ambitious targets. If you need help to develop your Climate Action Strategy, please contact  Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

FAQs for becoming certified under Climate Active – Part 3 [with video]

This article follows on from part 1 and part 2 of this series, in which we discussed general questions about carbon neutrality, scopes, the Climate Active Program and typical emissions sources in a Climate Active carbon footprint. In this blog post, we’ll address how to get certified carbon neutral under Climate Active and how much it costs to get certified under the Climate Active program.

How do I become certified under Climate Active?

To become certified carbon neutral under Climate Active, there are four basic steps.

  1. Determine your carbon footprint boundary
  2. Calculate your carbon footprint
  3. Get your carbon footprint verified
  4. Purchase carbon offsets and submit all documentation to the Commonwealth Government

What responsibilities do you have under Climate Active?

The following list shows your responsibilities under the Climate Active program. Please note that a registered consultant can help you with engaging a verifier, collecting all necessary data, completing your report and guiding you through the offset purchase process.

  • Sign Licence Agreement
  • Pay annual fee
  • Engage auditor/verifier
  • Complete report or provide all data to a Registered Consultant (please note that 100% Renewables is a Registered Consultant)
  • Purchase offsets
  • Sign the Public Disclosure Statement and submit the report
  • Submit web profile
  • Use the Climate Active trademark correctly

How much does it cost to become certified under Climate Active?

There are four fee components for getting certified under Climate Active

  • Engage a registered consultant to help you with the carbon inventory boundary and carbon footprint calculation
  • Engage a third-party validation provider to verify the work done by the registered consultant
  • Buy carbon offsets to achieve carbon neutrality
  • Pay Climate Active membership fees

NOTE:
Please contact us for an estimate of how much you will likely need to pay for these four fee components. We can provide you with a 1-page report.

Let’s have a look at these fees in detail.

How much do I have to pay a registered consultant?

We are a registered consultant under the Climate Active program. Our fees depend on the size and complexity of your organisation, on how much of the work you would like to do yourself, as well as on the emission sources that are included. It’s best to contact us for a quote. We will give you a fixed fee quote once we understand your circumstances a bit better.

How much do I have to pay a verifier?

Just like with registered consultant fees, verification costs also increase with the complexity and size of your organisation. It is likely that verification providers will charge a higher fee if you choose not to engage a registered consultant.

What is the difference between a registered consultant and a verifier?

A ‘registered consultant’ can be engaged to develop your carbon inventory boundary, carbon footprint and emission reduction strategy. They would liaise with you, your verifier and the Commonwealth. It is not mandatory, and you could do this step yourself, but it is highly recommended that you do engage a registered consultant as they have the skilled resources who have done the training and are experienced in this work.

A verifier is an independent third party who must be engaged to validate the carbon boundary and footprint. Your registered consultant cannot be the same person or business as the verifier so that there is no conflict of interest.

Could we do any of this work ourselves?

You can develop your own carbon footprint in accordance with the Climate Active rules if you have the in-house resources. In any case, you will need to engage a verifier. You might find that a verifier’s fees are then a little higher, as they may have to do more detailed checking than they would otherwise have to do.

How much do I have to pay for carbon offsets?

There is a wide range of costs, depending on the actual offset project, its location, accreditation standard and co-benefits, as well as the volume you are purchasing. The range can be from $1.50 to $28 per carbon offset.

It is usually helpful to run a workshop with your key stakeholders to work out your preferences and what is feasible given your emissions and budget.

How much are Climate Active membership fees?

Climate Active licence fees depend entirely on the size of your current footprint. There are four brackets which range from under 2,000 tonnes of carbon emissions to over 80,000 tonnes. You will pay between $820 to $2,627 inc GST for the lowest bracket, a fee which will be charged annually. If your footprint is greater than 80,000 tonnes, you will need to pay $18,911 inc GST annually. These fees increase by 2.5% every year.

Do I have to pay all these fees every year?

No. You will have to pay yearly Climate Active membership and carbon offset fees to continue to be a carbon-neutral company. And you do need to calculate your carbon footprint annually as well, but this would be much less than the first time, and you should make sure that all the data collection and calculation processes are documented so that you can do the work in-house, or mainly in-house.

You will only need to pay the validation provider once every three years.

Does the size of my company matter?

Yes, absolutely. Because of the rigour and multi-step process that is involved with getting certified under Climate Active, there is a certain amount of cost involved with becoming carbon neutral under Climate Active.

To give you an example, the smallest bracket under Climate Active is between 0 and 2,000 tonnes of yearly emissions for organisations. 2,000 tonnes of carbon emissions roughly equal the electricity consumption of 300 homes or the fuel consumption of 600 cars.

Say your organisation emitted 100 tonnes of carbon emissions yearly. Climate Active fees would be $820 inc GST, while registered consultant and verification costs can vary between $500 and $10,000 each, depending on who you engage. Carbon offset costs will range from $1,200 to $2,800, depending on the exact carbon credits you would like to purchase.

Do I have to calculate my carbon footprint every year?

Yes, you will have to calculate your carbon footprint every year. Your organisation might have changed, or your carbon footprint boundary, or the way you collect your data. Your business activity may also have changed, resulting in a higher or lower carbon footprint. You may have outsourced activities that were previously insourced. The carbon intensity of the grid may also have changed, resulting in potentially lower emissions.

It is essential to calculate your carbon footprint every year so you can see the effect of those changes. It will allow you to celebrate any success you’ve had with emissions reductions or getting closer to your goal. Alternatively, it will be a good opportunity to put a particular focus on emissions that might have increased over time or that you want to target with your next emission reductions projects.

We recommend using a consultant such as 100% Renewables to help with the yearly calculation, but if you have the skills set and availability inhouse, you can undertake this activity yourself.

If you are going through Climate Active certification for the first time, the whole process can seem a bit confusing. Engaging a registered consultant such as 100% Renewables will ensure a smooth and easy process. Please download our Climate Active brochure to find out more about how we can help you with your Climate Active certification.

100% Renewables’ staff are registered consultants with Climate Active. If you would like to achieve certification, or prepare for certification, please contact Barbara.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

 

FAQs for becoming certified under Climate Active – Part 2 [with video]

One of our service offers is helping our clients determine their Climate Active carbon footprint and obtain Climate Active certification from the Commonwealth Government. Over the last few months, we’ve received many calls of organisations wanting to find out more about Climate Active accreditation, which resulted in the publication of  Part 1 of this series.

In Part 2 of this series, we will discuss more details about scope 1, 2 and 3 emissions and what emission sources typically form part of a Climate Active carbon footprint. In the final blog post of this series, we will go into more details about how to get certified under Climate Active.

What are scope 1, scope 2 and scope 3 emissions?

Scope 1 emissions are emissions directly generated at your operations, such as burning natural gas or driving company cars, or refrigerant gases in your air conditioning equipment.

Scope 2 emissions are caused indirectly by consuming electricity. These emissions are generated outside your organisation (think coal-fired power station), but you are indirectly responsible for them.

Scope 3 emissions are also indirect emissions and happen upstream and downstream of your business. Examples are waste, air travel, the consumption of goods and services, contractor emissions, or leased assets.

Overview of GHG Protocol scopes and emissions across the value chain

Figure 1: Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard

Supply chain emissions/Scope 3 categories

According to the GHG Protocol, specifically the Corporate Value Chain Accounting and Reporting Standard, there are 15 categories of supply chain/scope 3 emissions

Upstream supply chain emissions

  1. Purchased goods and services
  2. Capital goods
  3. Fuel- and energy-related activities (not included in scope 1 or scope 2)
  4. Upstream transportation and distribution
  5. Waste generated in your operations
  6. Business travel
  7. Employee commuting
  8. Upstream leased assets

Downstream supply chain emissions

  1. Downstream transportation and distribution
  2. Processing of sold products
  3. Use of sold products
  4. End-of-life treatment of sold products
  5. Downstream leased assets
  6. Franchises
  7. Investments

While this list looks a bit overwhelming, not all emission sources will be relevant. It’s important to prioritise your data collection efforts and focus on your most significant and relevant emission sources. You can ask questions such as whether you expect the emission source to be large relative to your scope 1 and scope 2 sources, or whether you have influence over the activity, or whether your stakeholders deem the emission source relevant.

The graphic below shows a graphical representation of a typical Climate Active boundary for emission sources.

Typical Climate Active boundary for emission sources

Figure 2: Typical Climate Active boundary for emission sources

What are the benefits of calculating supply chain/scope 3 emissions?

Just looking at your scope 1 and scope 2 emissions can give you a distorted picture of your environmental impact. Going through the list of upstream and downstream scope 3 emission sources is a great exercise to identify the carbon intensity of your value and supply chain. It encourages the quantification and reporting of emissions from various suppliers, which can help you drive greater emission reductions. It will also have a snowball effect by not only you focusing on reducing your direct emission sources, but also encouraging your suppliers to reduce theirs.

For many organisations scope 3 emissions can represent a much larger emission source than scope 1 and scope 2 emissions, and it is often eye-opening to calculate your carbon footprint across all three scopes. Also, the more scope 3 emission sources you include in your carbon inventory, the more credibility your statement of carbon neutrality will have.

Understanding scope 3 emissions will help you plan for potential future carbon regulations and can guide corporate procurement decisions and product design.

What emission sources are in a typical Climate Active footprint?

A Climate Active carbon footprint encompasses many emission sources across the three carbon accounting scopes. One of the first steps in getting certified under the Climate Active program is to determine your carbon footprint boundary.

You need to include all emissions that you have direct control or ownership of, such as natural gas, transport fuel usage by your vehicles, and electricity consumption in your operations. You also need to identify all emissions that are a consequence of your activities but are outside of your direct ownership or control, such as waste and contractors’ transport.

You must also include emissions from third party electricity use under your organisation’s control even if they are offsite, such as outsourced data centres, if these emissions are large relative to other emission sources.

You don’t need to include every single emission source, but you must assess all other direct and indirect emissions to determine whether they are ‘relevant’.

The relevancy test

Under Climate Active, particular emissions sources are relevant when any two of the following conditions are met:

  • The emissions are likely to be large relative to your electricity, stationary energy and fuel emissions
  • The emissions contribute to your GHG risk exposure, and including and addressing them will help you to avoid future costs related to energy and emissions
  • The emissions are deemed relevant by your key stakeholders (such as major customers, suppliers, investors or the wider community)
  • You have the potential to influence an emissions reduction
  • The emissions are from outsourced activities that were previously undertaken in-house, or from outsourced activities that are typically undertaken within the boundary for comparable organisations. Data centres and transport are typical examples of this.

If an emission source is relevant, you must include it in your carbon footprint boundary. You can exclude emissions that are not relevant, but you should disclose these in your public reporting documents.

You may find that many emission sources will be relevant, but you don’t have to collect data for all of them. For instance, if the associated emissions constitute less than 1% of the total carbon footprint, you can include the source in your boundary, but you don’t have to calculate its associated emissions.

There are many more questions to be answered, so stay tuned for Part 3 of this blog post series. If you are going through Climate Active certification for the first time, the whole process can seem a bit confusing. Engaging a registered consultant such as 100% Renewables will ensure a smooth and easy process. Please download our Climate Active brochure to find out more about how we can help you with your Climate Active certification.

100% Renewables’ staff are registered consultants with Climate Active. If you would like to achieve certification, or prepare for certification, please contact Barbara.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

 

FAQs for becoming certified under Climate Active – Part 1 [with video]

One of our service offers is helping our clients determine their Climate Active carbon footprint and obtain Climate Active certification from the Commonwealth Department of Industry, Science, Energy and Resources.

Over the last few months, we’ve received many calls of organisations wanting to find out more about Climate Active accreditation, so we thought it would be a good idea to publish a Frequently Asked Questions about Climate Active. In this article, we will discuss questions about the program in general. In the next blog post, we will go into more details about how to get certified under Climate Active.

What is carbon neutrality?

Carbon neutrality (or zero net emissions) is reached when all emissions in your defined carbon footprint boundary are zero. Ideally, your carbon inventory boundary will encompass as many emission sources as possible so that your claim for carbon neutrality is credible.

You can reach carbon neutrality by:

  • Reducing your emissions onsite through energy efficiency or by installing solar PV
  • Buying renewable energy
  • Buying carbon neutral products and services
  • Netting off the rest of your emissions through the purchase of carbon offsets

What is Climate Active?

Carbon neutrality can be self-declared, by calculating your carbon footprint, and offsetting it. However, it does not come with the same credibility as getting certified under a Government-backed program. This is where Climate Active comes in.

Climate Active is a highly trusted certification program, which is administered by the Commonwealth Department of Industry, Science, Energy and Resources. It was first launched in 2010 and was originally known as the National Carbon Offset Standard (NCOS).

Initially, it was only possible to achieve carbon-neutral certification for organisations, products and services, but in 2017 the certification options were expanded to events, buildings and precincts.

Organisations that achieve certification under this program are allowed to display the Climate Active trademark and logo, which showcases this achievement.

What are the benefits of going carbon neutral under Climate Active?

Becoming certified under Climate Active shows that you are taking a stand in terms of climate change and that you want to be a leadership organisation. It signals to your staff, suppliers, and customers that you have a purpose beyond making money. Climate Active certification provides your business with the opportunity to:

  • Demonstrate that your organisation is a leader by taking a stand on climate action
  • Align with Sustainable Development Goals
  • Differentiate your brand and increase customer recognition
  • Meet growing stakeholder expectations and enhance reputation
  • Attract and retain talented employees and build internal capacity
  • Connect better with the community
  • Generate revenue, increase customer loyalty
  • Save energy and operating costs
  • Future-proof your organisation by managing carbon risk, including supply-chain risk

Can I go carbon neutral outside of Climate Active?

If you are looking to achieve carbon neutrality in Australia, the most credible way is to get certified under Climate Active. However, it is not mandatory to get certified under this Standard. You can use the Standard for guidance in calculating and offsetting your carbon footprint and self-declare carbon neutrality. Alternatively, you can use the Standard to understand what your Climate Active carbon footprint would look like, in preparation for future certification under the Standard.

Should we go carbon neutral under Climate Active now or wait till our net zero target date?

If you have a long-term goal to reach net zero emissions, you can fast track this achievement by going carbon neutral under Climate Active right away.

Then as you reduce your carbon emissions by installing solar, or by being more efficient with your energy use, you will be able to reduce your carbon offset purchases. Done this way, you have set yourself an internal carbon price (equal to the price of your carbon offsets), which you can use to get sustainability projects over the line more easily.

Going carbon neutral right away will also signal to the market that you are not working towards a goal that is far away, but that you are taking immediate steps to address climate change.

What is the difference between NGER and Climate Active?

The National Greenhouse and Energy Reporting (NGER) scheme, established by the National Greenhouse and Energy Reporting Act 2007 (NGER Act), is a national framework for reporting your greenhouse gas emissions, energy production and consumption. Reporting under NGER is mandatory for large energy users and carbon emitters, and only applies to scope 1 and scope 2 greenhouse gases (see the graphic below).

Overview of GHG Protocol scopes and emissions across the value chain

Figure 1: Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard

On the other hand, Climate Active is a voluntary program, and it requires that you report your upstream and downstream scope 3 emissions, as well as scope 1 and scope 2.

There are many more questions to be answered, so stay tuned for part 2 of this blog post series which discusses more details about scope 1, 2 and 3 emissions and what emission sources typically form part of a Climate Active carbon footprint.

If you are going through Climate Active certification for the first time, the whole process can seem a bit confusing. Engaging a registered consultant such as 100% Renewables will ensure a smooth and easy process. Please download our Climate Active brochure to find out more about how we can help you with your Climate Active certification.

100% Renewables’ staff are registered consultants with Climate Active. If you would like to achieve certification, or prepare for certification, please contact Barbara.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

 

5 key considerations for Climate Emergency Plans [includes video]

This blog post follows on from the one last week. I recently presented to the Maribyrnong community in Melbourne on emissions trends and barriers to the uptake of renewables, as well as considerations for the development of climate emergency plans. Today’s article discusses five key considerations.

You can also watch me talk about these five key considerations in this 5-min video:

About the Climate Emergency

The problem of rising GHG emissions

Global temperatures are rising and will continue to grow. Without globally significant efforts, greenhouse gas emissions may increase to over 100 billion tonnes annually by 2100, which is double current emissions. Even if all countries met their current pledges under the Paris Agreement, we are on track to exceed 1.5°C of warming (above pre-industrial temperatures), and to then increase by 3-5°C by 2100 — with additional warming beyond.

Projected temperature increase according to Climate Action Tracker

Figure 1: Projected temperature increase according to Climate Action Tracker

Rising global temperature causes catastrophic impacts, such as bushfires, droughts, floods, severe weather events, heat waves, rising sea levels and disruptions to our food supply.

By how much do we need to decrease emissions to have a ‘safe climate’?

According to climate science, a safe climate is one where global temperature increase stays less than 1.5°C above pre-industrial temperatures. We need to decrease our emissions by 45% from 2010 to 2030 and then to net-zero by mid-century to give us a 50/50 chance of meeting this target. This means that we need to almost halve our emissions by 2030.

Emitting greenhouse gases under a ‘current policies’ scenario means that climate risk will be catastrophic. Incremental change is not enough to get climate risk to an acceptable level. The only way this risk can be adequately managed is by rapid action.

Declaring a climate emergency

Declaring a climate emergency recognises that aiming for net-zero by 2050 may be too late. It means that your climate efforts need to

  • start now,
  • increase in scale rapidly and
  • continue for decades.

In 2016, Darebin City Council in Victoria was the first government in the world to declare a climate emergency. Now, as of the 1st of May, 95 Australian local governments have made the same declaration.

Following the declaration of a climate emergency, you need to develop a Climate Emergency Plan that sets out how you will help address the climate emergency.

5 key considerations for developing Climate Emergency Plans

Consideration #1: Net-zero ASAP

If your council declares a climate emergency, you should aim to achieve net-zero emissions for your LGA as soon as possible, for instance by 2030. You may even need to target negative emissions by mid-century by incorporating drawdown measures.

Drawdown is the projected point in time when the concentration of greenhouse gases in the atmosphere stops increasing and begins to reduce. Drawdown can only be achieved by removing greenhouse gases from the atmosphere, such as through agriculture and forestry.

Consideration #2: Include adaptation and resilience in your plan

Climate change is not some distant impact in the future. It’s here, and it’s affecting us already. Your climate emergency plan needs to include actions on how your council and community can adapt to climate change, in addition to reducing your carbon emissions.

Adaptation for council operations means that built assets, such as roads, stormwater drains and buildings, may not be able to withstand flooding, fire and intense storms. It means that your zoning and planning decisions will probably need to change and that there may be an increased demand for council services, such as water supply or community support for the elderly. Your area may also experience food supply issues. You will need to have emergency response plans for severe weather events, heat waves, flooding and bushfires and need to risk-assess the impacts on your community and corporate services.

Council also needs to help the community be resilient in the face of climate change. Resilience is the ability to withstand and recover from climate change impacts. As an example, you could help the community grow their own food and to develop resilience plans that assist your residents and businesses in bouncing back after a disaster.

Consideration #3: Include the community

Emissions for the operations of a local government are much smaller than overall community emissions. It is not uncommon for council’s emissions to only constitute 1% of overall emissions in the LGA. It’s not enough to focus on how council itself can mitigate against and adapt to climate change; the plan also needs to incorporate the community.

Climate emergency plan for the community should be developed with the community, by involving them through surveys and workshops, and by forming environmental advisory committees.

Emissions for council operations are small in comparison to community emissions

Figure 2: Emissions for council operations are small in comparison to community emissions

Consideration #4: Everyone must act

While the Federal and State governments have the greatest levers to reduce carbon emissions, local governments are closest to their communities. They play an important role in both mitigation and adaptation.

However, a council cannot alone bear the weight of emissions reduction and adapting to climate change in a community. Householders, business and all levels of government must collaborate to achieve the goals.

Local governments are in a great position to work directly with the community and to help them with addressing climate change rapidly. Council should also lobby other local governments, the state and federal governments to be more ambitious in their climate change action.

Consideration #5: Solutions already exist – they just need to be implemented

It’s easy to defer action by claiming that in future, better solutions will exist. The fact is though, that we already have all the solutions we need to mitigate against climate change. They only need to be implemented and fast.

It’s crucial to extend the scope of a climate emergency plan to a wide area of impact categories. Key solution areas of climate emergency plans are energy efficiency, solar PV, grid decarbonisation, transport, waste, buying clean energy, consumption of goods and services, emerging technologies, governance and leadership, forestry and agriculture, climate risk, clean energy generation, stationary fuel switching, education, and planning & development.

Key solution areas of climate emergency plans

Figure 3: Key solution areas of climate emergency plans

Within those solution areas, the biggest levers to achieve emission reduction in the community are solar panels on as many roofs as possible, energy efficiency in homes and businesses, electrification of space and water heating, electric vehicles, and waste diversion from landfill.

100% Renewables are experts in developing climate action strategies, both for council operations, as well as for the community. If you need help to develop your Climate Change Strategy, please contact  Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

What you need to know about accounting for LGCs, STCs, ESCs, VEECs, ACCUs

This blog post has been updated in Dec 19 to reflect the re-branding of NCOS to ‘Climate Active’.

For many sustainability managers, navigating the many acronyms that exist for renewable energy certificates like LGCs and state-based certificate schemes like ESCs for carbon reduction activities can be confusing. Some schemes are federal; others are state-based. Some relate to energy, others to carbon. Some can be used for carbon reduction; others can’t. To make sense of these three and four-letter acronyms, we thought it was time to publish a blog post on this topic.

Renewable Energy Certificates (RECs)

Description

Once electricity from renewable sources enters the grid, it mixes with electrons from multiple sources, like coal-fired power plants, and becomes indistinguishable. To track renewable energy, Renewable Energy Certificates (RECs) are assigned for every megawatt hour created from renewables. Each REC is assigned its own unique number to track the ownership of the environmental (and social) benefits of the renewable energy. They can be traded separately from the underlying electricity.

Renewable Energy Certificates (RECs)
Renewable Energy Certificates (RECs)

Renewable Energy Certificates (RECs) were created to spur the development of renewable energy generation through a market-based mechanism of supply and demand. A REC has a financial value attached to it, which fluctuates depending on prevailing market conditions.

In Australia, RECs are supported by Australia’s Renewable Energy Target, which states that by 2020, 33,000 GWh must be generated from renewable sources (this equates to about 23.5% of the overall total). The scheme ends in 2030.

RECs are divided into Small Scale Technology Certificates (STCs) and Large-Scale Generation Certificates (LGCs).

Treatment

The party that owns the REC owns the claim to that megawatt hour of renewable energy. Renewable energy certificates are used to offset electricity consumption. They cannot be used to offset other emission sources like fuel consumption or Scope 3 emissions like waste or business travel.

Small-scale Technology Certificates (STCs)

Description

STCs are like an upfront subsidy for renewable energy systems that are under 100kW. They are deemed upfront and come with your renewable energy installation.

Treatment

Under previous Australian carbon accounting rules (Climate Active) selling the STCs (i.e., claiming the subsidy) meant that you were not allowed to account for the emission reduction. However, under revised Climate Active’s rules, behind-the-meter energy usage originating from small-scale onsite generation systems can now be treated as zero-emissions energy, regardless of whether any STCs have been created, sold or transferred to any other party. This applies to systems installed in the past as well as future installations.

As such, you can add the self-consumption of electricity from your solar PV systems to your total demand for electricity, and this generation is treated as zero-emissions electricity for your carbon footprint. You can also use the generated renewable electricity against your renewable energy target.

Large-scale Generation Certificates (LGCs) from onsite renewable energy generation

Description

If your renewable energy system is larger than 100kW, you are eligible for one LGC for every megawatt hour your solar PV system generates. As opposed to STCs, the LGCs are not deemed upfront. You need to keep track of your renewable energy generation on an annual basis to be able to create and then sell LGCs. While LGCs currently have a much higher market value than STCs, this can change in line with the supply and demand for certificates by liable entities (like electricity retailers).

Treatment

If you sell the LGCs, you will generate income. However, if you sell your LGCs, the carbon reduction and renewable energy generation associated with the energy generated cannot be claimed.

According to the Climate Active, behind-the-meter energy usage originating from large-scale onsite generation systems that have created LGCs can be treated as zero-emissions energy only if the equivalent amount of LGCs are voluntarily retired. Behind-the-meter energy usage that is not matched by an equivalent amount of voluntarily retired LGCs must be accounted for in the same way as grid-based energy, and offset accordingly if a carbon neutral strategy is pursued.

Large-scale Generation Certificates (LGCs) from offsite renewable energy generation

Description

Rather than having a system onsite, you can purchase LGCs from a renewable energy project that is grid-connected, or offsite. There are principally two options to purchase offsite LGCs – either through a Power Purchase Agreement (PPA) or through a broker.

Treatment

Large-scale Generation Certificates (LGCs) are treated the same as the purchase of GreenPower® provided the certificates are retired. If you have entered into a PPA without obtaining and retiring the LGCs (purchasing the black portion only), then you cannot claim the emissions reduction/renewable energy attributes from the project.

 

A note on surplus electricity

The treatment of surplus electricity from renewable energy and batteries from the perspective of renewable energy and carbon abatement claims is complex. You can read more about this topic in our blog post at  https://100percentrenewables.com.au/how-to-account-for-exported-solar-electricity/.

GreenPower®

Description

The GreenPower® program is an independent government accreditation scheme and is recognised as the most highly regarded standard for offsite renewables in Australia. GreenPower® purchases are additional to Australia’s Renewable Energy Target, and an extensive two-tier auditing process ensures that no double counting can occur. To purchase GreenPower®, you can approach your electricity retailer, buy from an independent provider, decoupled from your electricity agreement or through a GreenPower® PPA.

Treatment

The purchase of GreenPower® is considered to be equivalent to the direct use of renewable energy. This means that you can claim the emissions reduction associated with this action. You can also use purchased GreenPower® towards your renewable energy claims.

Australian Carbon Credit Units (ACCUs)

Description

The Emission Reduction Fund (ERF) is a voluntary scheme that provides incentives for organisations and individuals to adopt new practices and technologies to reduce their emissions. Participants can earn ACCUs for emissions reductions. The ACCUs can be sold to the Commonwealth under a carbon abatement contract with the Clean Energy Regulator, or they can be sold on the voluntary market and are eligible as offset units under the Climate Active.

Treatment

If you generate ACCUs from emissions reduction projects occurring within your boundary, you can claim the reduction as part of your carbon account only if the ACCUs from your projects are voluntarily retired. If the ACCUs are not retired, you are required to account for your emissions without the reductions associated with the projects (i.e. as though the projects had never occurred).

Carbon offsets

Description

One carbon offset represents one tonne of carbon emissions that are not released into the atmosphere, that occur as a result of a discrete project. The emissions reductions from a particular carbon offset project can be sold to enable the purchaser to claim those carbon reductions as their own. Renewable energy is one type of offset activity, but there are many others like energy efficiency or forestry projects.

Treatment

Carbon offsets can be used to offset any emission source, including ones that are not electricity related. You cannot use carbon offset for any renewable energy claims.

State-based white certificate schemes

Description

Several jurisdictions have energy efficiency schemes that require energy retailers to achieve energy efficiency in their customer portfolio. The NSW Energy Savings Scheme and the Victorian Energy Efficiency Target Scheme are the biggest in terms of number of certificates. The ACT and South Australia operate similar, but smaller schemes mainly targeting households and small business.

Energy Savings Certificates (ESCs) – New South Wales only

ESCs created under the Energy Savings Scheme (ESS) reward energy-saving projects through a financial value on every tonne of carbon that is abated by an organisation. The objective of the scheme is to reward companies that undertake projects that either reduce electricity consumption or improve the efficiency of energy use. The ESS began on the 1st July 2009 and is part of the NSW Government’s plan to cut greenhouse gas emissions. The scheme is legislated to run until 2025 or until there is an equivalent national energy efficiency scheme.

Victorian Energy Efficiency Certificates (VEECs) -Victoria only

The VEET scheme was established under the Victorian Energy Efficiency Target Act 2007 and commenced on 1 January 2009. Each VEEC represents one tonne of carbon dioxide equivalent (CO2-e) abated by specified energy saving activities known as prescribed activities. The abatement is calculated by comparing the difference between the energy use after the completion of an upgrade or project and the ‘baseline’ energy use, which refers to the amount of energy that would have been used if the energy efficient installation/project had not taken place. VEECs are bought by large energy retailers with a liability under the scheme.

Treatment of white certificate schemes

You are not required to account for state or territory-based energy efficiency schemes. Emissions reductions resulting from activities supported by these schemes can be counted towards your carbon account regardless of whether any associated certificates have been created, sold or transferred to any other party. So, in short, you can claim the ESCs/VEECs/other white certificates and the carbon reduction.

 

Carbon accounting for all these different federal and state schemes can be confusing, as may be accounting for your Scope 3 emissions. If you need an expert to help you with putting your carbon inventory together, please contact Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog. 

10 ways to ‘green’ your electricity supply

This blog post has been updated in Dec 19 to reflect the re-branding of NCOS to ‘Climate Active’.

If your organisation has already implemented a range of energy efficiency measures like changing your lighting to LED, optimising your air conditioning, and engaging your employees to be more energy efficient you may be interested in further options to reduce your carbon footprint.

A great opportunity is to look at ways of greening your electricity supply.

It seems simple, but once you start investigating you will find that there are many options available, with more emerging all the time. So, how to make sense of the growing list and choose the right one for you?

To help you with the selection, we group ten options for greening your supply into three broad categories:

Buying carbon offsets

Buying carbon offsets ties in nicely with a carbon management strategy. You can purchase carbon offsets from overseas or domestically, or from a mix of the two. If you don’t want to deal with purchasing carbon offsets, you can switch your account to a supplier that offers carbon neutral electricity, which automatically reduces your electricity-related emissions to zero. Make sure that the carbon neutral electricity is accredited to the Climate Active to ensure credibility. Currently, Climate Active-accredited carbon neutral electricity for businesses is available from only one supplier.

Installing renewables

If your roof space allows for it and you are not facing any barriers like overshadowing, you can install solar panels. Solar PV panels are ideally suited to many businesses because there is daytime demand for electricity. If sized correctly, most of the renewable energy generation can be used directly, without exporting anything to the grid.

In Australia, the Clean Energy Regulator distinguishes between small-scale (<100 kW) and large-scale generation (>100 kW).  Solar installations smaller than 100 kW are eligible to receive STCs (Small-scale Technology Certificates). STCs lower the cost of a solar installation and act like an upfront subsidy. Installations larger than 100 kW attract LGCs (Large Scale Generation Certificates). On an annual basis, you will need to keep track of the renewable energy generation to be able to sell your LGCs and get a financial return. Please note that if you sell your LGCs, you will not be able to claim the carbon reduction nor the renewable energy generation.

Buying renewables

The most straightforward way to buy renewables is to purchase GreenPower®. If you are large enough, you can also directly purchase LGCs in the spot market, but the minimum parcel size is 5,000 certificates, which is equivalent to the electricity use by a multi-storey office building. Another option which is gaining in popularity is joining a renewable energy buyer’s group, like WWF’s[1], who aggregate corporate demand to simplify the procurement process and to access cheaper rates for renewable energy.

Corporate Power Purchase Agreements (PPAs) are another alternative that is gaining traction in Australia. This is where organisations directly contract with a renewable energy developer to purchase the renewable energy. The advantages of this approach are that you can point to a particular project and claim that this is your source of renewable energy.

People and organisations also love the concept of community renewables. As an example, an organisation with a suitable roof space hosts a renewable energy project, and the community can participate by financing this project. The host agrees to buy the power at an agreed price that is lower than grid electricity, but high enough to repay the capital cost and deliver a return to investors. Your organisation can either host a project, if you have got suitable roof space, or help finance a project.

In future, there may also be an 11th option, if peer-to-peer energy trading becomes a reality. This allows producers of renewable energy to sell any surplus they have to others directly, rather than having to go through a corporate retailer, via powerful online trading platforms that handle all of the complexities of each transaction.

To compare these different options to one another, you can apply two main tests:

  • Does it meet your organisational needs?
  • What do the financials look like?

This may be a simple or a complex assessment depending on your situation. You may need to take into account your environmental objectives, staff and customer needs and perceptions, your supply chain, ongoing effort or input, and energy market considerations, and other factors relevant to your situation.

To help you get started we have summarised some of the main attributes and issues to consider. These are tabulated below. Remember, your choices to green your electricity supply are not “either-or” decisions, but can be mixed and matched to get you the best outcome.

 Claim carbon neutralityClaim 100% renewable energyLocal climate change solutionNeed suitable roof or land spaceInternal setup and administration effortPotential risksCosts and cost savings
Purchase overseas offsetsYesNoNoNoLowReputational, suitable accreditation, offset price fluctuationVery low cost, no savings
Purchase domestic offsetsYesNoYesNoLowSupply, Climate Active-accredited, offset price fluctuationLow cost, no savings
Switch to carbon neutral electricityYesNoNoNoLowOffset price fluctuationLow cost, no savings
Install: STCsYes, under upcoming NCOS rulesNo, if sold YesYesMediumSTC prices, energy price fluctuation Medium cost, medium savings
Install: LGCsOnly if retiredNo, if sold YesYesHighLGC prices, energy price fluctuationHigh cost, high savings
Purchase GreenPower®YesYesYesNoLowGreenPower / LGC price fluctuationHigh cost, no savings
Purchase LGCsYesYesYesNoMediumLGC price fluctuationHigh cost, no savings
Join buyer’s groupYesYesYesNoHighSupply, contract term, link to retail agreement, retailer willingnessPotential cost savings
Corporate PPAYesYesYesNoHighSupply, contract term, link to retail agreement, retailer willingnessPotential cost savings
Community renewablesYes, if you are hostingYes, if you are hostingYesYes, if you are hostingMediumProject cost, host tenureTypically medium investment, medium return
No, if you are investingNo, if you are investingYesNo, if you are investingMediumProject cost, host tenure Typically medium investment, medium return

 

While the qualitative and financial analysis of your options can be complex, Australia’s renewable energy and carbon markets are mature and a wide range of support is available to assist. You can obtain much of the information online, from industry bodies or government organisations. Energy market experts, solar suppliers, brokers and consultants can complement your purchasing and senior management expertise to help you take decisions that are the best fit for your organisation.

If you have discovered interesting options for greening your electricity supply, don’t hesitate to contact Barbara or Patrick for further information.

 

[1] http://www.wwf.org.au/what-we-do/climate/renewable-energy-buyers-forum#gs.AjJo7AQ