UK exits the EU (more EU Notices)

Reminder : more EU Notices are issued – please find all EU Notices and Notices issued by EU Bodies (such as ECHA) here.

Please note the latest ones include EU Notices on Aviation and the internal Energy Market.

Unless a ratified Withdrawal Agreement establishes another date, the UK will become a third country (as respects the EU rules and participation in EU institutions and bodies) from midnight CET on 29th March 2019. These Notices set out the changes that will apply from that date. The changes are subject to any transition arrangements that may be contained in any ratified Withdrawal Agreement at the date above.

ESOS II (UK)

ESOS is a UK law that gives effect to EU Law concerning the energy audits of large companies (an article of the Energy Efficiency Directive). An equivalent of ESOS is in place in each of the other EU-27 member state countries.

Under ESOS, large UK organisations were required to carry out ESOS energy assessments before the deadline of 5 December 2015, using one of four compliance routes:

• ESOS Energy Audit

• ISO 50001 Certification

• Display Energy Certificates

• Green Deal Assessments.

By the deadline, qualifying organisations should have carried out their energy assessment(s) and notified the Environment Agency (EA). The assessments should then be repeated at least once every 4 years.

If an organisation has a UKAS-accredited ISO 50001 certificate that covers the full scope of ESOS, then this will suffice as ESOS compliance. All organisations need to do then, is notify the EA and provide proof of compliance via that route.

However, if ISO 50001 is not used as a route to compliance, then an ESOS energy audit will be needed as the next best and most common available route to compliance.

ESOS II or ESOS 2 ?

Every four years, a new compliance period starts. The qualification date for compliance Period 2 is 31 December 2018, with proof of compliance covering the period (from 6 December 2015 to 5 December 2019) being required by 5 December 2019. This is known as ESOS II or ESOS 2. It is not a change in the law, it is a new compliance period starting.

If your organisation has chosen an ESOS energy audit as the compliance route for Period 1 then you will now have an ESOS evidence pack that will include:

• the calculation for your total energy consumption

• a list of your identified areas of significant energy consumption

• details of the energy saving opportunities identified.

However, you won’t be able to use this information to demonstrate Period 2 compliance, so this exercise will need to be repeated – see earlier for the ESOS 2 deadlines.

Alternatively, information from your first ESOS energy audit can be used as the basis for implementing an energy management system (EnMS) to allow realisation of the energy saving opportunities.

If your system is then certified to ISO 50001 during the first four years, your organisation will automatically demonstrate Period 2 ESOS compliance.

Unabated Coal Plant Closure (Britain)

Consultation on the closure of unabated coal generation in Britain by 2025 was recently held. It has been known that unabated coal generation would cease, because this had already been announced. The UK Government has now published its implementation plan today – here. This sets out the plan to realise the ceasing of unabated coal generation in Britain by 2025 (as of now, there are no coal plants in Scotland). NB: energy policy is a reserved matter in Scotland and a non-devolved matter in Wales. Energy policy is a devolved matter in Northern Ireland.

A new emissions intensity limit will be applied to generating units, of 450g CO2 per kWh of electricity generated, from 1st October 2025. This limit is broadly the emissions intensity of an unabated gas generator and is in line with the existing Emissions Performance Standard that applies to new build fossil fuel plant. The limit will be applied on a unit-by- unit basis, as proposed in the consultation. Units could meet this standard by investing to abate CO2 emissions significantly.

Note: the 450gCO2/kWh emissions intensity limit will be an instantaneous limit. This contrasts with the existing Emissions Performance Standard, which sets an annual limit on CO2 emissions from fossil fuel generators, based on their capacity and an assumed 85% annual load factor. Applying the existing Emissions Performance Standard on an annual basis could allow unabated coal units to run at relatively low load-factors and this will not be permitted.

As proposed in the consultation, to ensure that the emissions intensity limit is applied only to generating units that use coal and that there are no unintended consequences for other forms of generation, the limit will be applied to units burning any solid fossil fuel (i.e. coal, lignite, etc.), irrespective of site boundaries, and with a thermal capacity of over 300MWth. Compliance with the emissions intensity limit will be on a net CO2 basis, in that emissions from other fuels co-fired with solid fossil fuel will be included in the calculations for emission intensity. The emissions intensity limit will not apply to units that convert fully to other fuels.

To avoid the use of unsustainable biomass in units that co-fire – for the purposes of compliance with the emissions intensity limit, the net CO2 emissions from coal units co-firing with biomass will be calculated as the sum of the emissions from the coal element of the fuel diet, plus net life-cycle CO2 emissions attributable to the biomass element of the diet. It is recognised that this will have the incidental effect of increasing the relative proportion of biomass that would need to be combusted with coal in order to remain under the emissions intensity limit. This does not preclude any other biomass sustainability requirements that might be introduced in the future.

The documents published today identify that Coal is the most carbon intensive fossil fuel and that the decline in coal generation over the last few years has led to a significant reduction in the carbon intensity of the power sector. The UK Government assessment, as set out in their updated Impact Assessment, is that the closure of unabated coal plant will yield guaranteed reductions of 15MtCO2. In addition to this, reductions of harmful air pollution such as Sulphur Dioxide (SO2), Nitrogen Oxides (NOx) and particulate matter (PM) will be guaranteed. This will contribute to the improvements in air quality that are being actively pursued at national level (in response to court action also) to reduce impacts on human health and the environment.

In 2017, the UK Government published an air quality plan to reduce roadside concentrations of Nitrogen Dioxide and in 2018, the UK Government will publish a Clean Air Strategy outlining its plans to reduce emissions of air pollutants from a wide range of sources. This will be a further Blog post.

Note: the UK Prime Minister will give a speech on the topic of the Environment next week. Depending on its content, this may be a further Blog post.

The documents published that the UK government is considering the appropriate legislative vehicle for introducing the emissions intensity limit from 1 October 2025 and other measures required to implement it. As the introduction of the emissions intensity limit will prevent unabated coal units entering into the Capacity Market auctions held in late 2021/early 2022 for the 2025/26 delivery year, and subsequent auctions for delivery years beyond that, the documents state the required legislation can be expected before these 2021/22 auctions. A final Impact Assessment will be published at that time. A further Blog post may be made at that time, or this post updated. Post updates do not forward to inboxes, so please make a note to return to check this Blog post.

Clean Growth Strategy (UK)

Published this morning, 165 pages setting out the areas of new policy and rules for all UK, the BEIS Clean Growth Strategy (persuant to sections 12 and 14 of the Climate Change Act 2008) is here

Key points of relevance to industrial energy and environment (your ISO compliant Energy Registers) are as follows :

(1) Re the EU Emissions Trading System (EU ETS) covering the “traded sector” (power, heavy industry and intra EEA aviation) which collectively account for around 40 per cent of UK emissions under carbon budgets – the document confirms commitment to reducing emissions in these sectors and states the UK already has a “range of domestic policies in place to support this”. 

The document statement is “we will seek to ensure that our future approach is at least as ambitious as the existing scheme and provide a smooth transition for the relevant sectors”.

Note : the document states “the Government is considering the UK’s future participation in the EU ETS after our exit from the EU and we remain firmly committed to carbon pricing as an emissions reduction tool whilst ensuring energy and trade intensive businesses are appropriately protected from any detrimental impacts on competitiveness”.  

Carbon prices for the 2020s will be set out in the 2017 Autumn Budget. 

(2) For sectors not covered by the EU ETS, the document states two sector policies operate at EU rather than UK level and are particularly important for driving emissions reductions – new car and van CO2 regulations, and EU “fluorinated gas quotas”

The document statement is “we remain committed to reducing emissions in these areas and will offer certainty to industry as soon as possible on our future relationship with the EU. We will seek to ensure our future approach is at least as ambitious as the current arrangements”. 
(3) Re EU products policy which sets minimum standards for a range of products such as white goods and lighting, which improve energy efficiency (NB: I put a recent post about EU Ecodesign) –

The document statement is “we continue to support these policy measures, which cut energy bills, increase energy security, reduce emissions and help customers make informed choices, and we will keep step with equivalent standards wherever possible and appropriate, or even exceed them where it is in the UK’s interest to do so. This may include products not yet covered by European legislation, such as smart appliances”. 

(4) Re Non-energy and climate EU frameworks and policies which affect the UK, such as the Common Agricultural Policy. 

The document statement is “for instance, we will take the opportunity of leaving the Common Agricultural Policy to address climate change more directly by designing a new system to support the future of farming and the countryside, with a strong focus on delivering better environmental outcomes, including tackling climate change”.

Note : the proposal is to work with the British Standards Institution (BSI) to develop a set of voluntary green and sustainable finance management standards to promote responsible investment practices globally. The BSI will have completed the necessary standards scoping exercises and have the first standard in production by the first half of 2018.

Note : the document states the Government will put in place a “simpler, more ambitious and long-term policy and regulatory framework“, to –

(A) “make it easier for businesses to identify where they can save energy by simplifying the energy and carbon reporting framework” (this will entail changes to local law – please follow this Blog – when the law changes occur – please look out for Email Alerts)

(B) “ensure that those who lease premises to businesses, including in the service sector, continue to refurbish and improve the performance of their buildings. In parallel, all new commercial and industrial buildings should be more energy efficient”.

(C) “help to understand how we can encourage greater investment in energy efficiency measures and technologies, including establishing an Industrial Energy Efficiency scheme to help large companies install measures to cut their energy use, and working with the financial sector to identify how such measures can be taken forward”.

“Energy intensive industries will require steps beyond energy efficiency. Out to 2030, this will require industry to make progress in switching from fossil fuel use to low carbon fuels such as sustainable biomass, in line with broader Government priorities on delivering clean air, and clean electricity. Beyond 2030, this switching will need to substantially increase in scale and be coupled with the deployment of new technologies, for example carbon capture, usage and storage (CCUS). Over the course of this Parliament, we will therefore also develop a framework to support the decarbonisation of heavy industry. Overall, one possible pathway to 2032 could involve emissions from business and industry falling by around 30 per cent on today’s levels to as low as 83 Mt by 2032″.

Summary Local Schemes – the document states the Government will :

(1) continue with plans to close the CRC Energy Efficiency Scheme following the 2018-19 compliance year. “We will drive energy efficiency by implementing the previously announced increase to the main rates of the Climate Change Levy from 2019.” (see the 2016 changes to the Finance Act 2000 (as amended) – I did not send out an Email Alert at the time).

(2) undertake an evaluation of the Climate Change Agreements to inform any successor scheme from 2023.

(3) build on existing schemes such as the Energy Savings Opportunity Scheme (ESOS), undertaking a comprehensive assessment of its effectiveness and consider any future reforms.

(4) (alongside this Strategy), consult on a new and streamlined energy and carbon reporting framework to replace some existing schemes, such as the reporting element of the CRC Energy Efficiency Scheme, and align with mandatory annual greenhouse gas reporting by UK quoted companies. This will improve the way in which businesses report their energy use, and provide businesses with the information needed to identify how they can reduce energy bills. (The document states this consultation is underway – please check with BEIS). 

(5) establish an Industrial Energy Efficiency scheme to help large companies install measures to cut their energy use and their bills.

Note : The Government has commissioned an independent review of Building Regulations and fire safety, being led by Dame Judith Hackitt. The review will report in spring 2018. Subject to the conclusions of that review, the Government intends to consult on making improvements to Building Regulations requirements for new and existing commercial buildings where there are “cost- effective and affordable opportunities, and it is safe and practical to do so”. This will look to promote low carbon and higher energy efficent heating, ventilation and air conditioning systems in new commercial buildings.

Energy efficient products (EU)

In the European Union, many everyday products such as washing machines, refrigerators, domestic boilers and cooking appliances carry energy labels and are designed to meet minimum energy efficiency standards.

Energy labels help consumers choose energy efficient products. Hitherto, the labelling requirements for individual product groups have been created under the EU’s Energy Labelling Directive, a process managed by the European Commission. Products had been labelled on a scale of A+++ (most efficient) to G (least efficient).

In July 2017, a new Energy Labelling Regulation was published that will gradually replace the Directive. In the future, products will be labelled using a simpler A to G scale, as the development of more energy efficient products means that the lowest categories in the previous scale are no longer needed. Consumers will also have access to a database of product labels and information sheets, and defeat devices, which alter a product’s performance under test conditions, will be banned.

The new Energy Labelling Regulation is here. It is in force from 1st August 2017. As a European Regulation it is directly applicable in all member States, without necessary enactment of local law. 

Companies can create their own labels for energy efficiency using a range of labelling tools.

Ecodesign regulations require manufacturers to decrease the energy consumption of their products by establishing minimum energy efficiency standards. By setting these standards at European level, manufacturers do not have to navigate through multiple national regulations when launching their products on the market.

The ecodesign requirements for individual product groups are created under the EU’s Ecodesign Directive, process also managed by the European Commission. As an alternative, industry sectors may sign voluntary agreements to reduce the energy consumption of their products. The Commission formally recognises such agreements and monitors their implementation.
The (recast) European Directive (dating 2009) is here

It is in the UK news that energy inefficient and noisy vacuum cleaners are banned from today (1st Sept 2017), this is the date set out by the vacuum cleaner specific European Regulation made under the EU’s Ecodesign Directive. The European Regulations issued for products covered by the Ecodesign Directive are located from this link

The European ENERGY STAR Programme is a voluntary energy labelling scheme for office equipment. With the ENERGY STAR logo, consumers can easily identify energy efficient products. It covers office equipment including computers, servers, displays, imaging equipment and UPSs.

ENERGY STAR was started by the US Environment Protection Agency in 1992. The EU agreed to take part in 2001 to include office equipment not carrying an EU energy efficiency label.

Under EU law (Article 6 and Annex III (c) of Directive 2012/27/EU), central governments and EU institutions must purchase office equipment with energy efficiency levels at least equivalent to ENERGY STAR.

Government Changes (UK)

Deep and fundamental changes are underway both to Whitehall (government departments) and to the Ministers responsible. Please look out for my Blog posts over the next days as I summarise the changes and their implications for policy and policy delivery.

Please ensure anyone who is not yet signed up to follow my Blog, signs themselves up now. Follow the instructions. 

Thank you