news update For all the latest news stories visit www.eibi.co.uk
Carbon border charge to finance EU green growth Revenues from the forthcoming European Union’s proposed carbon border charge can be used to help finance the bloc’s green transition. But this will never be declared as the charge’s official objective, because the new levy must be created only for environmental reasons, to avoid contravening World Trade Organisation (WTO) rules. Steps being taken to tighten the trading price of carbon allowances within the European Union’s emissions trading scheme (EU:ETS) are set to increase the current price of between €25 and €30 per tonne. Official forecasts from AEFP, the French equivalent of the CBI, reckon that these will reach a minimum of €40 per tonne by 2030 and above €230 per tonne by 2050. Because these prices are borne only by European participants, this June the European Commission is set to publish a “carbon border adjustment mechanism.” The goal is to avoid carbon leakage, whereby companies relocate manufacturing abroad to countries where pollution costs are lower. Two main options are under consideration. These are a border tax, which unless skilfully constructed may contravene WTO rules. Or a notional carbon levy mirroring the EU:ETS. Under this option, a benchmark of carbon consumption is created for a given product corresponding to the EU average. It is then multiplied by the current ETS traded price. Crucially, such an external allowance would not be tradable. Amongst industrial sectors most likely to be covered initially are those designated as “raw materials”. These include the cement, steel and chemical industries. For so long as the new UK:ETS has trading prices on a par with the EU:ETS, it is not likely to have much impact on business based in the UK. It is clear though that, should significant divergences in the system take place, then the new arrangements would be imposed on UK-based firms. Patrick Pouyanne, CEO of Total, endorsed the concept as a “very logical extension of the EU’s carbon price policy.”
REPORT STATES 2M JOBS TO BE CREATED IN DEVELOPED COUNTRIES
Jobs in energy efficiency set to surge Creating millions of jobs in energy efficiency is the fastest way to restore prosperity and combat climate change. It will deliver far more employment than any form of electricity generation. That is the verdict of the International Energy Agency, which has already identified almost 2m jobs due to be created in the next two years in developed counties, with many more to come if governments create the right stimuli. Two thirds of these jobs would be in the buildings sector. Most of these would be in retrofitting existing buildings. Over 75 per cent of buildings likely to be being occupied in 2050 have already been built. One of the main beneficiaries of the scheme would be for people with few academic qualifications, currently the worst hit by unemployment. The remaining jobs would be found in transport (20 per cent) and industry (16 per cent). According to the IEA, “as energy efficiency investments can be mobilised quickly, they are one of the most attractive investments in the energy sector. This is particularly
for governments seeking to protect existing jobs, or generate new jobs during the recession.” The IEA estimates that in 2019, before COVID 19, there were 2.4m energy efficiency jobs in the US, only 750,000 in China, but approaching 3m in Europe. Of these, the UK Office of National Statistics identified 114,000 in the UK. According to the IEA, the remarkable labour intensity of many
energy efficiency upgrades means that spending £1m on improving energy efficiency will generate between 6 and 15 jobs, depending upon the sector. Scaled-up worldwide there are potentially millions of jobs in delivering energy efficiency. It is billed as “the single quickest and cheapest way of reducing carbon emissions, since it both reduces existing demand for energy and renders many new power stations unnecessary.”
Sainsbury’s commits to reduce Scope 3 GHGs by 30% Supermarket chain Sainsbury’s has committed to set an absolute target to reduce its Scope 3 Greenhouse Gas emissions by 30 per cent by 2030, together with a net zero target for its Scope 1 and 2 emissions by 2040, in line with the Paris Agreement. As part of Scope 3, Sainsbury’s will be working with selected suppliers to develop their own Scope 1 and 2 targets, and measure their performance through industry disclosures such as CDP and the Higg Index. The retailer has reduced its Scope 1 and 2 carbon emissions by 42 per cent in the last 16 years despite growing as an organisation by 46 per cent. Sainsbury’s worked with the Carbon Trust to define an ambitious Scope 3 target which requires the reduction of absolute GHG emissions by 30 per cent by 2030, to align to a well below 2°C scenario. This includes reducing emissions from purchased goods and services sold, upstream transport and distribution and the direct use of sold products. Sainsbury’s will work collaboratively with its suppliers to deliver against their own Scope 1 and 2 targets to drive lasting change. By delivering against its Scope 3 targets by 2030, through innovation and collaboration, Sainsbury’s will endeavour to help customers make more sustainable product choices, helping them live well now and into the future. Over the past year, a number of energy saving initiatives have been launched in Sainsbury’s own operations, including the installation last year of its one millionth Aerofoil in its Battersea Park Local store, keeping fridges
cool and aisles warmer and saving 15 per cent of the energy used by the fridge. The strategies outlined to reduce Scope 1 and 2 emissions will see Sainsbury’s implement new initiatives within the refrigeration and lighting space such as LED technology, along with improving overall efficiency. The retailer’s Scope 3 efforts will focus on working with its suppliers to set their own carbon reduction targets and identify opportunities across product lifecycles.
06 | ENERGY IN BUILDINGS & INDUSTRY | FEBRUARY 2021
EIBI_0221_006-7-8_(MM).indd 1
11/02/2021 17:29
