AGENDA ITEM 4
BOROUGH OF POOLE
ENVIRONMENT OVERVIEW AND SCRUTINY COMMITTEE
8 JANUARY 2015
THE CARBON REDUCTION COMMITMENT AND GREENHOUSE GASES REPORTING UPDATE
PART OF THE PUBLISHED FORWARD PLAN YES
STATUS (Strategic, Service Delivery Information)
1. PURPOSE
1.1 To inform members of the Council’s 2013/14 financial year emissions reporting for Greenhouse Gases and the Carbon Reduction Commitment.
1.2 To detail the Council’s status for phase two of the Carbon Reduction Commitment
2. RECOMMENDATION
2.1 Members are asked to note the content of the report and continue to support the Council’s Carbon Management Programme.
3. CARBON REDUCTION COMMITMENT
3.1 The Carbon Reduction Commitment is the Government’s carbon emissions reporting scheme for major energy consuming organisations. Under this scheme participants are required to pay a fee per tonne of CO2 emitted each financial year based on the electricity and gas consumed by their building stock. These totals include schools, both LA and academies, but exclude PHP housing stock.
3.2 The scheme was announced in the 2007 Energy White Paper and introduced under the enabling powers in part 3 of the Climate Change Act 2008 and the CRC Energy Efficiency Scheme Order 2010.
3.3 The first qualification year was the calendar year 2008. This was based on the consumption of, rather than emissions from, the Council’s Half Hourly (HH) electricity meters, which are the meters allocate as qualifying supplies. If this total exceeded 6,000 MWh the Council would qualify for phase 1 of the scheme which ran from 1 April 2010 to 31 March 2014. The Council’s qualifying supply, which included schools and street lighting, was 15,542 MWh meaning that the Council clearly qualified for phase 1.
3.4 The first year (2010/11) of the scheme was a footprint year, which did not require a tax payment. During this year the Council reported emissions of 14,901 tCO2. This placed the Council 369th in the CRC Performance League Table (By comparison our neighbours Bournemouth Borough Council and Dorset County Council were 1199th and 1055th respectively. The table was topped by, amongst other international businesses, Manchester United Ltd) and would have required the Council to pay more than £178,000. If this figure remained constant for the remaining 3 years of the phase the total cost to the Council would be £536,436.
3.5 At the end of the second year of phase 1 the Council reported emissions of 9,280 tCO2. This was partly due to a pro-active change in metering arrangements by Council staff for street lighting which meant that street lighting was no longer a reportable supply. This took c. 4,000 tCO2 out of the Council’s reporting. This combined with the energy saving actions of the Carbon Management Programme, moved the Borough of Poole up to 23rd out of 2097 organisations in the CRC Performance League Table. (For comparison Bournemouth Borough Council was 643rd and Dorset County Council was 168th. Our performance also exceeded that of the Department of Energy and Climate Change who was 153rd) The CRC charge for phase 1 was £12 per tonne meaning that the Council paid £111,360 in tax payments, a saving of more than £67,000 on the previous year.
3.6 In the summer of 2011 the Government announced a major simplification of CRC for phase 1 and subsequent phases to reduce the administrative burden on participants. The Government had already altered CRC by removing the recycling payments, to be given to organisations who performed well in the performance league table. The major changes to phase 1 was the removal of the 90% rule, which meant participants could no longer discount 10% of their emissions and the abandonment of the performance league table.
3.7 The rule changes led to an increase in reported emissions in the third year of the scheme (2012/13) to 10,602 tCO2. This resulted in a CRC charge of £127,224.
3.8 The financial year 2012/13 was also the qualification year for phase two of the scheme, to start in 2014/15. As part of the summer 2011 rule changes there were two significant changes to phase two rules for the Council;
· All state funded schools would no longer be eligible for CRC
· Street lighting, whilst remaining part of CRC, is no longer considered as a qualifying factor.
The qualifying threshold was set at 6,000 MWh again, however, due to these rule changes the Council’s qualifying consumption was only 2,276MWh meaning that the Council did not qualify for phase two, starting in April 2014, saving approximately £120,000pa.
3.9 This meant that the 2013/14 financial year would be the last year of the Council’s participation in CRC. During this year the Council reported 10,244 tCO2 at a cost of £122,928. Below is a summary graph of the Council’s emissions and expenditure on CRC over the duration of phase 1.
3.10 Phase two of the Carbon Reduction Commitment is scheduled to run from 1 April 2014 until 31 March 2019. This extends beyond the life of the current parliament and as such, given the changes made to the scheme under the current Government, it is difficult to speculate on the future of the scheme. The Carbon Management Programme will continue to monitor the regulations produced and keep members and management team informed of any alterations pertinent to the Borough of Poole.
4. GREENHOUSE GASES REPORTING BACKGROUND
4.1 This is a separate reporting requirement to CRC and covers the whole of the Council’s energy portfolio, including all schools, communal aspects of social housing, leisure centres, street lighting and fleet fuels.
4.2 On 9 March 2011 Chris Huhne, the then Secretary of State for Energy and Climate Change, signed a Memorandum of Understanding (MOU) with the Local Government Group that recognised the pivotal role which Local Authorities have in tackling climate change. To support the principles of the MOU the Department of Energy and Climate Change requested that local authorities report the greenhouse gases emissions from their own estate and operations and publish the details online.
4.3 The first report was publish in July 2011 and required the Council to report on the annual GHG emissions for each financial year from 2007/8 until 2010/11. The requirement to report has been extended by the Department for every subsequent year to date.
4.4 The emissions figures have varied over the past seven years but are generally on a downward trend. Exceptions to this include an increase between 2007/8 and 2008/9 which was due to improved data collection following the launch of the Carbon Management Programme and increase in 2011/12 due, in the main, to an unusually cold winter. There then follows a rapid decline in emissions driven by a return to more mild weather, the work of the Carbon Management Programme and the impact of the increasing deployment of renewables reducing the CO2 emissions of grid electricity. At the start of the Carbon Management Programme in 2008/9 the Council’s emissions were 25,186tCO2. In 2013/14, the scheduled 5 years after the programme’s commencement, emissions were 18,934tCO2 a 6,252tCO2 reduction (24.8%) (this includes ‘grey fleet’ business travel emissions not included in the figures below).
4.5 In every Greenhouse Gases report we include a summary of the actions taken by the Council over the past year to reduce emissions in Poole. The most recent Greenhouse Gases emissions report can be found on the Carbon Management Programme pages on the Borough of Poole website www.boroughofpoole.com/environment/sustainability-and-carbon-reduction/carbon-management-programme and is included as an annex to this report.
4.6 Included in the report is a breakdown of Borough of Poole’s emissions by sector, detailed below;
5. FINANCIAL IMPLICATIONS
5.1 The Borough of Poole no longer qualifying for the Carbon Reduction Commitment means that the Council will no longer need to pay the annual Green tax of more than £120k per annum.
6. LEGAL IMPLICATIONS
6.1 The Carbon Reduction Commitment reports can be subject to external audits arranged at random by the Environment Agency. The Council must keep the records for the next 5 years to ensure compliance with the CRC regulations.
7. RISK MANAGEMENT IMPLICATIONS
7.1 Each year the CRC report is audited by the Council’s internal audit team to ensure compliance.
8. EQUALITIES IMPLICATIONS
8.1 None
9. CONCLUSIONS
9.1 Borough of Poole’s energy emissions has been falling since the instigation of the Carbon Management Programme in April 2008 due to the carbon saving actions of the programme. Since its commencement the Carbon Reduction Commitment has cost Borough of Poole £361,512 in Carbon tax payment, a £174,924 reduction from forecasted. Borough of Poole’s Greenhouse Gas emissions has reduced by 6,252tCO2 over the last five years, a reduction of 24.8%.
9.2 Current projects aiming to support further emissions reduction are;
· heat networks feasibility studies,
· Solar PV installations,
· the production of a community renewable energy toolkit (LEAP)
· energy efficiency retro-fits to our existing building stock.
Contact officer:
Paul Cooling
Carbon Reduction Manager
01202 63(3719)
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