24 minute read
COP26 32
We have made progress in recent months to bend the temperature curve closer to 2 degrees; but the science shows that much more must be done to keep 1.5 degrees in reach.
The world needs to halve emissions over the next decade and reach net zero carbon emissions by the middle of the century if we are to limit global temperature rises to 1.5 degrees.
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As part of the Paris Agreement, every country agreed to communicate or update their emissions reduction targets - their Nationally Determined Contribution (NDC) - every five years to reflect their highest possible ambition and a progression over time.
These targets set out how far countries plan to reduce emissions across their entire economy and/or in specific sectors. 2020 marked the first of these five year cycles.
This means that countries are expected to update their 2030 targets before the Glasgow summit. We are calling on all countries to update them so that they are in line with holding temperature rise to 1.5 degrees.
It is especially important that developed countries and the largest emitters take the lead. While targets are important, they must translate into action, fast. Which is why developed countries must rapidly phase out coal power, and all countries should commit to not opening or financing any new coal-fired power stations across the world.
At the same time, we must work together to provide developing countries with better support to deliver clean energy to their citizens. Forests play a vital role in removing carbon from the air. Protecting them is critical if we are going to meet our climate goals, and right now they are still being lost at the rate of a football pitch every few seconds.
We are encouraging countries to work together to reform the global trade in agricultural commodities (like beef, soy and palm oil) so that sustainable production is rewarded, helping farmers to make a better living while forests are protected.
And finally, we need to clean up our air and reduce carbon emissions by switching to driving zero emission cars, vans and trucks. The UK will end the sale of new petrol and diesel cars by 2030. Countries with major car markets should follow our lead. If we send a strong signal to the industry, investment will shift more quickly to new, clean technologies, and all countries will be able to enjoy the benefits sooner.
We are making progress
Around 70% of the world’s economy is now committed to reaching net zero emissions, up from 30% when the UK took over as incoming COP Presidency.
More than 80 countries have formally updated their NDCs, and all G7 countries have announced new NDC targets that put them on the path to net zero emissions by 2050.
Accounting for around half the global economy, all the countries that make up the G7 have updated their 2030 targets to put them on a pathway to net zero by 2050.
Solar and wind are now cheaper than new coal and gas power plants in two thirds of countries of the world.
Briefing documents on COP26 can be read in full on the website at https://ukcop26.org
THE RACE TO ZERO WILL BE WON ON TWO-WHEELS: JOIN THE ELECTRIC CARGO BIKE REVOLUTION
In the year of COP26, the increasing urgency of the climate crisis is at the forefront of our minds. While the problem seems insurmountable, the Bike Coop remains optimistic that businesses have the power to implement positive changes and be part of the solution.
Air quality in our cities remains a big problem, but infrastructure continues to improve and ease our transition to low-emission vehicle use. The Bike Coop believes that the answer to many transport problems in cities lies on two wheels. And the advancing technology of the electric cargo bike presents a viable, low-cost, long-term solution. If it’s about minimising environmental damage, preserving air quality and saving cash, the electric cargo bike ticks all the boxes.
What is it?
A traditional cargo bike is a heavy, difficult vehicle. The bike itself could carry a hefty load, but even the strongest, most proficient cyclist could only manage short journeys before burning out. Not ideal if you were making deliveries all day or if you needed to get to a meeting after the school drop.
Enter the electric cargo bike. And it is truly revolutionary. The electric assist means hills and loads are all but eliminated. Start pedalling and the motor kicks in, making long or hilly journeys significantly easier. The brakes are very reliable and pretty effortless, and the bikes are easy to manoeuvre round winding roads and city junctions.
The Cost
Parking in urban areas of Scotland is at a premium, and is expensive. Whether it’s for staff parking or simply making deliveries, it costs a surprising amount just to have your vehicle remain stationary at the kerbside. The electric cargo bike can be placed on the pavement, removing the need for parking charges.
And that’s only one aspect you can save on. The infographic below gives the cost comparison with a petrol-run van. The savings on fuel, insurance and initial outlay cost are clear, especially when you consider the benefits of an interest-free loan from Transport Scotland, repayable over four years.
There are other, less obvious savings. Multiple studies have found that, on average, employees who exercise regularly take fewer sick days. Using an electric cargo bike provides staff an easy way to exercise without having to over-exert themselves.
Is an electric cargo bike an actual alternative to a business vehicle?
It depends. If you’re delivering sofas, you can’t easily switch to an electric cargo bike – although Sustrans moved their entire London office using only pedal power so nothing is impossible! However, if you regularly carry loads of around 200kg (31 stone, 6 lbs) or less, switching to an electric cargo bike need not be difficult. The electric assist provides substantial help so it’s a world away from the old sweat-and-tears of getting to your destination. And, as no licence is required, any member of staff can ride it – an excellent way of adapting to unplanned staff absence, last-minute meetings or deliveries. clients. Laptop, projector, product samples? Easy with an electric cargo bike! Brand it up and advertise your company wherever you ride.
Types of electric cargo Bikes
There are two main types of electric cargo bikes: bikes with load-carrying at the front and bikes which load up on the back.
The Riese & Muller range carries its load on the front (but you can add panniers on the back for even more space). This front-load space can be used in multiple ways including a fixed box or a platform to which you can attach your own carriers.
The Tern GSD or HSD models carry most of its cargo at the back of the bike (although there is load capacity on the front too). They’re the same length as a regular bike and can be stored on their ends and fit in a car. This makes TERN very practical and versatile bikes.
The Edinburgh Bicycle Cooperative is your local, independent electric cargo bike retailer. Drop in and speak to us about how we can help solve your business needs. Find us in Bruntsfield, Canonmills (Edinburgh) and Aberdeen in Scotland, or Leeds and Newcastle in England.
The Tern HSD or GSD can be stacked vertically The Tern GSD electric cargo bike
www.edinburghbicycle.com
0345 257 0808
BiU
www.biu.com
TOP THREE TIPS FOR DECARBONISING YOUR BUSINESS
Anthony Mayall, chief commercial officer at BiU, explains the most impactful ways that businesses can reduce their carbon footprint.
Net zero is fast becoming the business norm. Over than a third of the UK’s FTSE 100 companies have set net zero emissions targets for 2050 or earlier, and more will certainly follow as regulatory, consumer and investor pressure drives the shift. The impact is being felt down the supply chain too, as organisations make climate change central to their procurement policies. One telling example is the arrival of new procurement rules last month for central government: any companies bidding for major contracts will soon need to have a net zero target and a credible carbon reduction plan. It’s clear that organisations ignoring their climate impact will find themselves on the back foot. So, what are the most meaningful steps that businesses can take to address their carbon footprint? Here are our top three tips:
1. Measure your energy consumption at a granular level and take action (daily).
Your electricity and gas use will account for a significant chunk (if not the majority) of your greenhouse gas emissions. The first step to reducing this is to understand how much you use, where, and when. Half-hourly metering information is a good start – but it can be a challenge to get a clear picture from such a large amount of data. It’s here that energy and carbon optimisation tools can help – such as BiU’s Energy Alarms service. Our analysts use your half hourly meter data to investigate periods of irregular or excess energy usage on your sites, and in turn take actions to reduce energy waste. As well as highlighting instant ways to improve efficiency, it forms an excellent basis for a long-term carbon reduction plan.
2. Move your electricity and gas to truly renewable sources.
As well as reducing your energy use, you should be switching to clean energy sources. This may seem like a simple matter of choosing the best-value green tariff, but it’s not quite that straightforward. The UK’s system of secondary trading in green energy certificates (known as REGOs) means that it is both legal and common practice for suppliers to advertise “100% renewable” tariffs while really getting most of their energy from fossil fuel sources. You need to ask potential suppliers directly how much of their energy mix comes directly from renewable sources. The more detailed the information you get, the better. BiU’s energy procurement team can do the hard lifting here, and help you source a genuinely green tariff. We can also offer advice on other routes too, which offer greater additionality, such as onsite renewable generation, or corporate power purchase agreements (CPPAs). These options take more careful consideration but are worth investigating longer term.
3. Offset.
The word “offsetting” says “greenwash” to many people, but, if done in the right way, it can play an important role in a company’s decarbonisation journey. The fact is, although businesses may have a credible carbon reduction plan in place, they won’t get to zero emissions overnight. Offsetting should be used in parallel (not instead of) genuine decarbonisation measures, to compensate for the emissions that have not yet been eliminated. For offsets to be considered, they need to ensure environmental integrity, they need to be real, measurable, genuinely additional (reductions that wouldn’t have occurred without the offset project) and achieve emissions reductions. The quality of offsets is often queried but over the past 10 years there have been significant advancements and there are now excellent, widely recognised standards in place, including the Verified Carbon Standard and Gold Standard.
It pays to get advice
At BiU, we work with many companies, big and small, to help them identify the most practical routes to carbon reduction. We can help you come up with a strategy to fit your organisation’s needs and resources. Today’s businesses face difficult decisions to stay competitive, but our expertise can help you thrive in an increasingly low carbon economy.
FUTURE IS BRIGHT FOR SCOTTISH RENEWABLE SECTOR
It’s an exciting time for the renewables industry in Scotland. The sector has remained relatively unscathed by the economic hardship brought on by COVID-19 and there is now a global focus on ensuring a post-pandemic green recovery.
At the heart of its recovery plans, the Scottish Government has pledged nearly £1.6 billion to support up to 5,000 jobs and tackle fuel poverty in a bid to end Scotland’s contribution to climate change. The investment will also transform heat and energy efficiency of buildings and rapidly accelerate the decarbonisation of an area which makes up a quarter of Scotland’s greenhouse gas emissions.
Figures revealed earlier this year show that 97.4 per cent of Scotland’s electricity demand was met by renewable sources in 2020 – 70 per cent of which came from onshore wind power. Investor appetite in the Scottish onshore wind market remains strong despite both the pandemic and continued political uncertainty from Brexit and renewed support for Scottish independence.
Andy McFarlane, Head of Renewables at Scottish law firm, Wright, Johnston & Mackenzie says: “The future of the renewable energy sector is looking bright here in Scotland.
“There are plenty of opportunities in this country at the moment – particularly in onshore wind power. Scottish onshore wind projects are attractive to developers who know there is a ready market for investors.
“Glasgow is set to host the COP26 climate change conference later this year, which will serve to bolster Scotland’s green potential and ambition.”
Wright, Johnston & Mackenzie LLP’s expert renewables team has a diverse range of specialisms across property, agricultural and crofting law, planning, construction, tax, and dispute resolution. Whether it is onshore wind, battery storage, hydro, biomass or solar - the renewable energy law team will be able to advise you.
Andy McFarlane
Visit www.wjm.co.uk/services-and-sectors/ sectors/energy or call 0141 248 3434 to find out more.
WHY EDUCATION IS KEY FOR SUSTAINABLE BUSINESSES
In fulfilling net zero obligations, UK businesses face pressure to adopt sustainable practices. With new legislation on the horizon, soon sustainability will be a legal business requirement.
Steven Kiakowski
Director of The Verdancy Group
But talk about organisational change is cheap. If I’ve learnt anything with my work supporting businesses to enact environmental change with The Verdancy Group, it’s that success comes from a sincere desire for meaningful change from the top with an emphasis on education.
Why be sustainable?
You’ve heard it a thousand times before, but it bears repeating: going green is good for business. Adopting better practices not only allows companies to play their part in protecting the planet, but also leads to new opportunities.
Increasingly, investments and contracts are going to businesses that can demonstrate their green values in action, not just in words. Consumers prefer sustainable businesses and unsustainable may soon mean unprofitable.
Green businesses can cut costs through reduced waste and energy bills, while attracting forwardthinking staff.
But achieving a sustainable vision takes a shared desire. And that takes education.
What we do
As the world’s transition gathers pace towards a net zero norm, we foresee nations, governments and businesses making sustainability, the environment and the circular economy core and critical aspects of everything they do. In order to lead and support this, we create bespoke learning materials, designed to maximise engagement either fully online, blended or delivered face to face. Our learning platform provides personalised content and curated experiences to not only fully engage the learner but also bring to life the purpose and importance of the subject area.
Our value add
We believe that our value is achieved when we work with organisations to scope, consult and create the learning and engagement content required to affect change. We understand that terms such as “net zero”, “carbon neutral” and “zero waste to landfill” impact a wide and diverse workforce in many ways. A culture change requires every member of a team to understand the fundamental principles not only the ‘’why’’ but importantly the ‘’how’’ in the steps and actions both personally and at a business level that we need to make to achieve net zero.
Sustainability skills for everyone
Transforming attitudes toward sustainability is a tough ask, particularly for long-established organisations with deeply instilled processes and practices.
Sustainable education is not just for new recruits; existing staff also need training and support to understand the importance of sustainability. Businesses should consider where teams are lacking in their environmental understanding.
Change from the top
While education is crucial, leadership must show sincere and ongoing commitment to sustainability. Often, that means going beyond current standards.
Before introducing new programmes, leaders must assess their current practices. Are they committed to sustainability or are they throwing money at carbon offset programmes simply to gain environmental management accreditations? Only through true leadership commitment does sustainability education effectively take hold.
Final thoughts
In our fight against climate change, education is vital. Let’s teach everyone to care for the planet, regardless of their industry.
Next steps
Working with organisations large and small we have delivered cost-effective training to employees improving the organisations’ ability to reduce their carbon footprint as part of their economic and societal transition towards net zero. If you would like to find out more, please talk to us about how to start your journey today.
ECO-MINDED ENERGY FIRMS ARE A HOTBED OF INNOVATION BUT VALUABLE TAX CREDITS ARE GOING UNCLAIMED
By Nigel Holmes, head of R&D Technical Operations, and Karen Taylor, group head of Grants, at specialist tax consultancy Catax
We are in the midst of a green revolution, but our progress toward Net Zero would be impossible were it not for the innovators - the companies striving to improve technologies and develop ones we cannot even conceive yet.
All over the country, businesses large and small are drawing up blueprints for the next advances that will make our homes greener and reduce emissions and pollution. However, innovation in any form usually requires significant upfront investment. This can make it less attractive to businesses focused in the short term on maintaining healthy cash flow and protecting profit margins. Even for companies committed to innovating regardless of the cost, the big leaps forward in technology, systems and processes would be out of reach for many without financial assistance.
Yet the innovations companies are already undertaking - and those they will in the future - are crucial in the fight against global warming and worsening environmental problems.
Thankfully, help is at hand through R&D tax relief initiatives and grants.
Unfortunately, we know from our own experience that too many companies remain unaware of these schemes. Take-up for Patent Box in particular remains low, and awareness is especially poor among SMEs. But if we are going to tackle the biggest environmental issues facing our planet, it is important that knowledge of these schemes becomes more widespread and that companies utilise them to propel us into a greener, cleaner world.
What are R&D tax credits?
The UK likes to think of itself as a global centre for research and development, and it has the tax breaks to match — a fact that is becoming increasingly important in light of the Government’s ambitious plans to reach Net Zero by 2050.
That the R&D tax credit scheme has been successful in stimulating innovation is clear when you consider that it has been running for two decades. More than 300,000 claims have been made in that time, with total tax relief hitting £33.3 billion.
Yet too many companies do not realise they are “doing R&D”. This can be due to the fact they see it as their day job, or they think R&D is for pharmaceutical companies curing diseases in laboratories.
But the scheme is open to any company investing time and money in new products or processes that meet HMRC’s definition of R&D. Any firm whose work seeks a “scientific or technological advance” and has faced a “scientific or technological uncertainty” can claim. This can take the form of a new process, product or service, or be an improvement to an existing one.
Firms can claim either a reduction in their limited company’s corporation tax bill or a cash lump sum (depending on whether the company is profitable or loss-making) - the average claim is £73,000.
Qualifying expenditure include staff costs - also covering subcontractors and externally provided workers, materials consumed, software and more.
The work does not even need to have been recent. Claims can be backdated up to two years from the end of the accounting period in which the work took place. Overall, R&D tax credits for SMEs are worth between 24.7% and 33.4% of qualifying expenditure, so it’s a significant benefit.
Companies with green technologies have already benefited
Successful R&D claims for green technologies are being made in a broad range of sectors.
One client, for example, has received a tax benefit to the tune of £114,000 so far for their ongoing commitment to improve farming and agricultural processes. They have made their equipment more eco-friendly by designing increasingly efficient systems for the drying of products, and cleaning and chopping.
Another company - which has received £54,000 in benefit so far - has become one of the leading manufacturers of low volume and high technology battery products. It designed a smaller battery pack to fit a popular compact car, supporting the global move from fuel to electric. The project had a number of complications, including retrofitting a new battery into a classic car with little space, while also ensuring it was highly efficient and low weight.
Meanwhile, another client has developed ecofriendly paint to prevent marine life attaching onto a vessel’s hull and causing drag. Not only is the paint better for the environment than previous solutions involving pesticides and volatile organic chemicals, it only requires two coats rather than four. The company has received a tax benefit of £39,500.
The money these companies, and thousands like them, have claimed is often pumped back into even more R&D work, building on the progress they have already made and playing an important role in helping their relevant industry become more sustainable and eco-friendly.
R&D is not the only tax relief
R&D is just the tip of the iceberg in tax reliefs on offer.
The development of green technologies often involves creating intellectual property, which may need to be protected via a patent.
This is where another tax relief scheme can come in useful. Patent Box reduces the Corporation Tax paid on patent-related profits to an effective 10% tax rate compared to the normal 19%. However, as the newest of three tax relief schemes, a huge proportion of companies remain unaware of it. Yet Patent Box can even be worthwhile for lossmaking companies to consider. If a company is loss-making overall, but has made profit from its patented products, it is still worthwhile claiming, as it increases the tax loss available elsewhere.
However, watch out for patents being registered in an individual’s name, rather than the name of the company that carried out the development of the product. Such an ownership arrangement means Patent Box is not available. While the sale or licensing of the patent will resolve this, it does lead to additional legal costs and other tax implications.
Using grants to unlock innovation
The strides companies are making in green technologies are crucial not just for protecting the environment, but also to help the UK bounce back from the economic consequences of the pandemic.
Grant funding will therefore almost certainly play an increasingly important role in freeing up funds to enable businesses to innovate.
One recently launched grant scheme from the Department for Business, Energy & Industrial Strategy is making £19.5 million available to projects developing novel Carbon Capture, Usage and Storage technologies and processes that reduce the cost of deployment. It is open for applications until August 29.
Meanwhile, the Low Carbon Hydrogen Supply 2 Competition aims to provide funding for projects that can help develop a wide range of innovative low-carbon hydrogen supply solutions. It is open for applications until August 2, while an energy storage innovation competition is due to launch later this year.
Other funding sources outside of the Government include Innovate UK. It is part of UK Research and Innovation, a non-departmental public body funded by a grant-in-aid from the UK government. Since 2007, Innovate has invested around £2.5 billion to help businesses across the country, with match-funding from industry taking the total value of projects above £4.3 billion.
These are just a few of many grants available, and there will doubtless be many more schemes opening in the coming year. It can be a minefield sourcing the best grant funding streams and then
applying, but experts can help you navigate this field and unlock the all-important cash to set a project on its way.
Some tax relief is available to companies receiving grants
It is worth remembering that a project cannot receive state aid twice. This means that if a state aid grant has been received, then the company cannot claim SME R&D tax relief. However, this does not mean tax relief is not available.
Legislation allows the company to claim Research & Development Expenditure Credit (RDEC). It is not as generous but does allow a project funded by a state aid grant to have some additional R&D tax relief too.
Don’t overlook Capital Allowances
It’s easy to forget about physical assets, as you don’t necessarily consider the place you work every day as being something eligible for tax relief. However, Capital Allowances (CAs) are a form of tax relief that relate to physical assets and can be worth considering.
CAs allow firms to offset the Corporation Tax they pay on profits against the expenses associated with a commercial property such as air conditioning, wiring, heating, lighting and security systems.
They are a tax relief on profits, so there can be no immediate benefit if a company is lossmaking. However, if a loss-making company is also making an R&D tax relief claim, a CA claim can increase the amount that HMRC will pay on the R&D claim.
Remember your record keeping
For anyone considering embarking on a project which could be eligible for R&D tax credits, it is worthwhile keeping a paper record as you go.
HMRC explains that there is a difference between making an unexpected discovery and the carrying out of R&D. For it to count as R&D, there needs to be a systematic project seeking to achieve an advance in science or technology.
Therefore, from the outset of your project, it is worth noting down what advances you are hoping to make and putting it in the context of the current state of knowledge and technology. This demonstrates your intent of making an advancement - and not that you just stumbled upon something new.
There is no record-keeping requirement specifically for the purposes of claiming R&D relief, but documents you could consider keeping track of include copies of meeting notes and correspondence relating to the research, contracts, invoices, bank records and PAYE records.
Going unclaimed
Our research suggests that although around 800,000 UK businesses are likely to be eligible for R&D tax relief, just eight per cent are claiming it.
As we march toward Net Zero, for the sake of the environment and the economy, the country needs companies which are innovating in the green space now more than ever, and these schemes are set up to help.
But we also know the world of R&D can be a minefield at times, especially for those who have never accessed it before. The tax laws around R&D tax relief are complicated, and the criteria for eligibility can be ambiguous. In order to get the largest tax relief return, companies need to have an expert on your side.
There’s no risk attached to an initial assessment with our experts, which will only take around thirty minutes. We’ll carry out a thorough assessment and if we can’t see an opportunity for an R&D tax relief claim, you walk away without spending a penny.
But if there is an opportunity to claim, companies can unlock tens of thousands of pounds - even hundreds of thousands in some cases. It’s worth enquiring to see what you might be able to get back.
CATAX
catax.com
SUSTAINABLE ENERGY ROUTE MAP DEVELOPED FOR ZERO-CARBON HEATING AND COOLING
Sustainable cooling experts are creating a roadmap to help reach the UK’s 2050 net zero carbon emissions target, whilst maintaining food security for consumers and economic opportunity for the country’s food industry, as the University of Birmingham secures £2.9 million of UK Government funding announced today for energyrelated projects.
