The Drivers and Benefits of Offsetting

This article was published on www.icroa.org

The International Carbon Reduction & Offset Alliance ( ICROA) published a report which looks at the current demand for carbon offsetting and also observing what drives businesses to use carbon offsetting as one of  the solutions to climate change.

Understanding Business Leadership on Climate Action

More can be done to increase action on climate change and close the gap on the global goal of a two degree limit. There is a disconnect between where science says we need to be and how far the Paris Agreement will take us, and the voluntary carbon market is crucial in bridging that gap.

This report considers the current demand for carbon offsetting, what drives businesses to use it as one of its solutions to climate change, and what the benefits are.

Its findings were taken from responses to a survey developed by Imperial College London in consultation with the UNFCCC and ICROA, and conducted among respondents across a wide range of sectors, including private, public and non-profit / NGOs.

Putting it all together: recommendations

Based on the report’s key findings, the following recommendations can be put forward to further promote the uptake of offsetting as a solution to bridge the ambition gap on the global goal of a 2°C limit:

1. Carbon offset projects make a valuable contribution to the reduction of GHG emissions. Better recognition of this contribution would demonstrate the value to companies in meeting their climate goals and motivate more businesses to invest in voluntary offsetting. Additionally, this research shows that:

  • There is a positive correlation between knowledge of the voluntary carbon market and confidence in its effectiveness to reduce GHG emissions. A broader understanding of the market from the corporate world would help grow demand
  • Better awareness of the role of offsettingwithin the carbon management plans of climate leaders would also increase demand

2. Offset buyers should measure their return from investing in voluntary carbon offset projects. 49% of respondents in this survey said they have experienced tangible benefits from voluntary offsetting, though in most cases these benefits are not being measured. Better data on these benefits would help build the case for companies to take voluntary action

3. Demonstrating co-benefits, in addition to carbon mitigation, will increase the return on investment. In turn, this will increase the willingness to invest in voluntary offsetting


Work with us to reduce and offset your carbon emissions today! For more information click here or contact Nishanthi on Nishanthi.lambrichs@climateneutralgroup.com

Download the full report here.

Colombia implements the carbon tax. Is South Africa next?

By: Jana Hofmann, Leading Researcher, Climate Neutral Group, 29 August 2017

Colombia has taking a significant step in addressing climate change. Colombia is the third developing country in the world (after Mexico and Chile) that has successfully passed new environmental tax legislation on carbon dioxide emissions. The new scheme is very simple and allows Colombian entities to offset 100% of their tax liabilities. What does the Colombian carbon tax entail and what type of carbon offset projects are allowed to participate? We compare and contrast the Colombian carbon tax with South African proposed carbon tax and carbon offset rules and discuss the importance of the carbon tax for South Africa.

Colombia’s commitment to climate change

Colombia has successfully ratified the Paris Climate Agreement, committing to reduce emissions by 20% by 2030, 30% below Business-as-Usual (BAU), with international support. President Juan Manuel Santos, who was inspired by Al Gore’s words, has been debating the introduction of the carbon tax since 2011. The Colombian government admitted that more than 70% of Colombian territory is vulnerable to global temperature rises. To be more precise, the majority of the population lives in the elevated Andes, where water shortages and land instability are already a reality, and on the coast, where the increase in sea level and floods can affect key human settlements and economic activities.

While many critics have expressed their scepticism regarding the sincerity of Juan Manuel Santos’s administration concern for environmental sustainability, the Colombian Government ultimately approved a tax on fossil fuels (Part IX, Impuesto Nacional al Carbono) equivalent to approximately US$5/tCO2e payable by producers and importers of fuels in December 2016. Furthermore, on June 2017, the Colombian government finalised the rules and conditions of carbon offsetting to allow high-quality carbon credits to be used against the carbon tax obligations. Unlike South Africa, where the use of carbon credits is proposed to be capped at only 5% – 10%, Colombian entities can offset 100% of their tax liability by investing in carbon offset projects. In addition, carbon credits generated outside of Colombia are eligible until the end of 2017, after which only Colombian carbon credits can be used. By allowing a cap of 100% as well as non-domestic credits during the first few months of the scheme, helps boost market liquidity – crucial in the early stages of any new domestic carbon scheme.

We have briefly reviewed the carbon tax and offset rules introduced by the Colombian government and provide an overview in the following table:

Colombia and South Africa are considered upper middle income countries. Both countries are rich in natural resources (e.g. gold, silver, platinum, oil and coal). Although Colombia faces a number of challenges, such as armed conflicts, illegal drug problems, disjointed urban and rural contexts, and limitations in subnational administrative capacity, the country has stepped up the fight on man-made climate change. It has followed the example of other Latin American countries, such as Mexico and Chile, who also put a price on carbon and make fossil fuel industries accountable for their emissions.

Where does South Africa stand?

South Africa is an important and active player in global climate change negotiations. The country has a very strong national climate change response agenda and a highly advanced regulatory and law enforcement framework. Nevertheless, the country faces political instability and corruption that unfortunately is delaying the enforcement and implementation of environmental regulations, and discourages private investment and the uptake of low carbon technologies. The delay in the signing of the power purchase agreements of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) is one example of many.

The South African carbon market is currently in limbo and if the carbon tax does not become law sooner rather than later, the country will miss the opportunity to ensure a much needed, and overdue, transition to low carbon economy which will help generate more employment and make South Africa more globally competitive. Therefore, it is crucial that the revised carbon tax bill, which was supposed to be tabled in Parliament mid-2017, is released as soon as possible. While Colombia has transparent and relatively straightforward carbon tax and offset rules, South Africa is still in process of clarifying and hopefully simplifying the procedures. However, how long will it still take South Africa to sign the carbon tax into law? The South African government has a chance to follow the example of Latin American countries and to become a role model for all African countries in cutting its emissions. The challenge the South African government faces is not only to design and to implement an effective carbon tax and carbon offset regulation, but also to carefully balance the energy needs, development priorities and environmental objectives.

For more information click here or contact Jana on jana.hofmann@climateneutralgroup.com

New Standard Launched to Accelerate and Measure Progress Toward the Sustainable Development Goals and Climate Targets

Climate Neutral Group is very excited about the publication of the Gold Standard for the Global Goals, which will allow private and public entities to certify a wide range of sustainability benefits and thereby contribute to the Sustainable Development Goals.

Geneva, Switzerland, 10 July 2017.  Gold Standard launches Gold Standard for the Global Goals, a new standard to quantify, certify and maximise the contributions of climate and development interventions toward the Paris Climate Agreement and the United Nation’s Sustainable Development Goals (SDGs).

The standard is set to help those who fund life-changing climate and development projects around the world – including businesses, governments and investors – to measure, report and track the full range of benefits they have contributed to. Supported by WWF and other international NGOs, it is also anticipated that the best practice standard will protect against accusations of ‘green-washing’ as well as open up new avenues of funding for large-scale programmes, like green infrastructure and sustainable supply chain interventions around the world.

Marion Verles, Chief Executive Officer of Gold Standard, said: “If we are to keep global warming well below 2 Degrees Celsius and meet the Sustainable Development Goals, climate action must be holistic and high-impact, helping the world develop on a sustainable pathway. SDGs are becoming a huge priority for a range of public and private sector organisations, but accurately measuring and reporting progress has presented a major challenge. Our new standard quantifies and certifies the many additional benefits Gold Standard projects deliver beyond carbon mitigation – for example by providing access to clean energy and water, creating jobs, improving health or protecting natural habitats – providing those who run or fund projects with new opportunities to measure and report their impact.”

Ambassador Franz Xaver Perrez, Head of the International Affairs Division for Switzerland’s Federal Office for the Environment, said: “When Switzerland looks at its options for meeting parts of its Paris target, we want to ensure that international carbon markets increase global mitigation ambition and encourage activities that go as far as possible toward the greater good. Climate mitigation projects that include strong sustainable development provisions, like those to be certified under Gold Standard for the Global Goals, make achieving the 2030 Agenda closer within reach.”

As well as incentivising more ambitious climate action from public and private sector bodies, the new standard is expected to unlock billions of dollars of funding needed to scale-up clean technology and sustainable development in cities around the globe. Cities emit around 75% of global CO2 emissions, yet less than 15% of global climate finance has reached cities as, according to the World Bank, only 4% of the largest 500 cities in the developing world are credit worthy in international markets. The Standard’s Urban Development module will help developers design and implement best practice projects, and quantify and communicate climate and development impacts such as cleaner air and improved health, to attract investment and gain public support.


 Working with Climate Neutral Group = progressively working towards achieving the SDGs

By REDUCING your carbon emissions you are working towards SDG 9, 11 and 13. By OFFSETTING your emissions, you are going the extra mile. This can be done by implementing, rolling out and investing in clean energy projects from which local communities benefit too. You will be supporting SDG 1, 2, 3, 5 and 6

We offer a range of Gold Standard offset projects:

Work with us to reduce and offset your carbon emissions, save money, help achieve the SDGs, fight climate change, and improve the lives of others.

For more information click here or contact Nishanthi on Nishanthi.lambrichs@climateneutralgroup.com

For more information read the full press release here.

The future is carbon-Priced and the US is getting left behind

Written by: Kristin Eberhard, on June 6, 2017 

As the US pulls out of the Paris Accord, other countries charge ahead towards a clean energy future.

A little over a year ago, 195 countries signed on to the historic Paris Climate Accord to limit global warming pollution. This year, the United States pointed a loaded gun at its own foot, and President Trump pulled the trigger, announcing he will withdraw from the agreement. But the rest of the world is moving ahead with carbon pricing programs that will give other countries a head start in the race to a clean energy economy. Notably, The United States’ neighbors to the north and south are adopting national carbon pricing programs in 2018, and the European Union and China are allying to become global leaders in the transition to a low-carbon economy.

Nations and regions making progress

Original Sightline Institute graphic, available under our free use policy.

North Americans are warming to dividends

The carbon prices already in place were worth about $50 billion in 2016, and international action coordinated by the Paris Accord could generate a new stream of revenue in participating nations in future years. Nations and states use the revenue to reduce other taxes, fund clean energy projects,and fill budget holes. And some jurisdictions give some revenue back to the people. The idea of carbon dividends, making polluters pay, and then writing people a check (similar to what Alaska does with taxes on oil production) is gaining ground in North America.interesting?

Author and entrepreneur Peter Barnes has long advocated for the idea that we all have an ownership share in common assets. More than a decade ago, he asked, “who owns the sky?”More recently, he asked, if Thomas Piketty is right that those who make money by owning things keep making more while those who make money by working keep making relatively less, how can we sustain our middle class, our democracy, and our planet? His answer to both questions is: we all have a share in the world’s natural resources, and, like shareholders, we all should receive dividend checks.

Canadians like the idea: Alberta’s carbon tax includes a small rebate, and the federal plan will send some money back to individuals. For nearly a decade, British Columbia has used carbon tax revenue to give money back to people in the form of income tax credit—not as transparent as dividend checks, but a similar idea. Now, BC plans to increase and expand its tax and use the new revenue to deliver rebate checks to ensure a majority of British Columbians are better off financially.

In the United States, California’s cap-and-trade program has always included a dividend in the form of a “climate credit” on everyone’s utility bill. But dividends are the heart of the new roposal for a revolutionary upgrade to California’s program. Between 50 and 90 percent of carbon revenue would go right back to individuals, so everyone in the state would get a check in the mail every quarter. Even if oil corporations ginned up fear that the carbon price was getting too high, everyday people would cheer because their checks would get bigger.

Many working on the California bill see dividends as critical to the bill’s success. California requires a two-thirds majority to pass new taxes, and Chevron sponsored an under-the-radar campaign to pass Prop. 26 in 2010, changing the definition of “tax” to ensure it applies to cap-and-trade too. As a result, California climate advocates must attract some conservative support for the new bill.

Californians’ hope that a carbon dividend might bridge the partisan divide that has stymied progress in the United States may be well-founded. After all, a few months ago, a group of prominent Republicans released the Conservative Case for Carbon Dividends, complete with a TED Talk and meetings with White House officials.

Advocates in Washington DC are also pushing a carbon fee and rebate.

The US hangs back, but the world moves forward

Countries and regions continue to march forward with carbon pricing. China, after years of experience with nine regional carbon pricing programs, is almost ready to institute a national program. Canada and Mexico are also set to roll out national programs. Meanwhile, the United States the United States lags. But California’s trailblazing climate efforts, and some conservative thought leadership on dividends, is laying promising groundwork for US action.

South African business and industries are taking steps towards mitigating the impacts of the proposed carbon tax legislation on their operations and investments. Climate neutral group has services such as the Carbon TaxScan, which helps businesses to measure and understand the amount of carbon tax the business is due to pay. You can reduce your business’ carbon tax liability even further by purchasing carbon tax offsets from our eligible South African offset projects.

Would you like to find out how much carbon tax your business might need to pay, click here for more information or contact on franz.rentel@climateneutralgroup.com 

 

IMPACT OF THE US WITHDRAWING OF THE PARIS AGREEMENT

IETA made the following statement about the fact that the US has announced to withdraw itself from the Paris Agreement. We at Climate Neutral Group support this statement.

STATEMENT IETA: 

Genève, 2017, June 1st

As was widely reported, President Donald Trump announced plans today for the United States to withdraw from the Paris Agreement. We issued a press statement, noting our disappointment and reiterating our intention to continue to work with US states, sub national authorities and nations interested in advancing market based solutions to climate change.

This decision was not a surprise. Trump made a pledge during the election campaign to withdraw from the Paris Agreement. Many Paris supporters urged him to reconsider – from US corporate CEOs to heads of state to the Pope and other religious leaders. Secretary of State Rex Tillerson and other cabinet colleagues urged him to remain in the agreement, but EPA Chief Scott Pruitt and Chief Strategist Steve Bannon reportedly pushed for exiting the agreement. Trump said that he decided to withdraw out of concern for the US economy.

We have seen strong reactions from many world leaders. It will take some time to understand all of the ramifications of the exit, both technical and political. We wanted to offer our initial thoughts about potential impacts, since you are probably gathering your own thoughts and reactions.

  1. Obviously, this is a big disappointment, because it weakens the strong show of unity around the Paris Agreement. But, as a consequence, we expect many other countries – and companies— to quickly rally around the Paris Agreement. The G7 statement last week was encouraging, as is the announcement expected tomorrow from the EU and China on enhanced cooperation on climate change.
  2. Given past experiences with the US withdrawal from the Kyoto Protocol, we expect California and the northeast RGGI states to enhance their own carbon market and climate policy agendas. Other states, from Virginia and Pennsylvania to Washington and Oregon, could become more ambitious on carbon pricing, given the void of federal leadership.
  3. Pressure from investor groups on US corporations will intensify. The climate risk shareholder resolutions at Exxon and Chevron this week are one example.
  4. We received several press inquiries (CNBC, CNN, Reuters, among others) about the possible trade sanctions that could be triggered by Trump’s decision. We emphasised that we believe in cooperation on climate change through markets, highlighting in particular Article 6 of the Paris Agreement. We also said that interest in border taxes or other trade restrictions could be reignited, but that it is a complicated subject – and could escalate in a harmful way. We urged calm and caution.

We will be tracking developments closely in the coming weeks, and we will do our best to keep you informed. We know this is a difficult development, but we encourage all IETA members to continue to speak out for market-based solutions for climate change and to encourage our colleagues in the US to forge ahead. A better day will come.

​Spekboom can fix ecosystems, create jobs and suck up CO2 – if SA gets a carbon tax

This article was published on the 24 May on mg.co.za

Written By Sipho Kings, the Mail & Guardian’s environment reporter, on 26 July, 2017

Spekboom was meant to be the ultimate symbol of sustainable development, a plant that could fix ecosystems and making farmers bucketloads of money. Then the world economy crashed and progress towards a local carbon tax stalled.

A few projects are chugging along, showing the potential of the indigenous plant to rehabilitate large parts of the country. But the shine has gone.

“This was going to be the big breakthrough for climate change. Instead of just being a victim, South Africa could plant spekboom, which would soak up carbon emissions and do so in a profitable manner,” says Professor Richard Cowling, who was there for the test project in 2004.

His name is on much of the research into how planting a 2.5m-tall evergreen succulent could transform the rural parts of the Eastern and Western Cape.

But that research now catalogues potential, not reality. “Maybe there was too much hype, so people expected too much of a miracle solution,” he says.

Cowling lives in Cape St Francis, with the restless blue Indian Ocean on one side and the rhythmic rotation of dozens of wind turbines on the other. This was an area that was almost impassable a century ago, given the dense thicket of spekboom that covered the coastal belt. The plant was a favourite of elephants. Thousands crashed through the thicket, eating the top leaves and spreading the seeds.

Then came the farmers who cut away the spekboom to introduce irrigated crops and livestock such as goats. The latter ate spekboom from the bottom up, ruining millennia of adaptation. With the food gone and land use changed, only a few hundred elephant remain in Addo Elephant Park.

All this broke the local ecosystem. Now, when the winter rain falls it washes away topsoil. This flows into dams, silting them up. Little water infiltrates deep into the ground to recharge aquifers. And none of this is good for farming, a bulwark of the local economy that formally employs 7% of the province’s workers.

Fixing ecosystems could turn this around. But planting spekboom is expensive and the plant grows slowly. It also means farmers have to take a leap of faith, converting land that makes money now into something that creates longer-term value. That’s where climate change and spekboom come in.

Because it is evolved to survive the arid conditions of the Karoo, spekboom has a few unique tricks. In winter, when it gets moisture from cold fronts, it photosynthesises like any other plant. In summer, it absorbs carbon dioxide (CO2) during the day but stores this away without photosynthesising. Instead, it does this at night so no water evaporates. That moisture is then stored as carbon compounds in the spekboom’s leaves, stems and roots.

In other words, the plant is really good at sucking carbon dioxide out of the air, something the world needs. Carbon dioxide levels are currently at 400 parts per million, their highest concentration in three million years.

Carbon trading schemes were introduced to lower CO2 concentration. Companies that emit carbon buy credits to offset against the carbon tax. Those credits pay for people to carry out activities to reduce the emissions, such as plant spekboom.

In the mid-2000s, this looked to be extremely profitable. Research by the Rhodes University-based Subtropical Thicket Restoration Programme found that a farmer could earn R440 000 a hectare each year by planting spekboom.

Speaking to the Mail & Guardian in 2008, Anthony Mills, then of Stellenbosch University’s department of soil science, said: “The bottom line is that the carbon market is booming and creating carbon credits is likely to be profitable.” At that time, companies were buying carbon credits for between €10 (about R130 then) and €20 a tonne of carbon emitted. Mills said the price was expected to reach €60 by 2030. That would mean R2.6-million a year per hectare for farmers.

Startups seized on this. Airlines advertised the fact that paying a bit extra on a fare would plant spekboom in rural South Africa. The money started to flow. Farmers in the southern part of the Eastern Cape started converting hundreds of hectares of land to spekboom. This was especially useful in an area where farmers were turning to wildlife as a source of income — spekboom is a good source of food.

Then came the 2008 financial crash. The bottom fell out of the carbon market. Carbon credits are now €5 (about R75) a tonne. That has all but destroyed the dream of spekboom. Without lucrative profits, farmers cannot afford the tens of thousands needed to convert their land.

But part of the spekboom project is surviving. Through the environment department’s Working for Land programme, R45-million has been invested in more than 7 000 hectares, creating jobs in areas where there is no industry.

Ecosystems become valuable to politicians when they create jobs. This guarantees a budget. Research by the Development Bank of South Africa, titled Natural Resource Management: An Employment Catalyst, shows that fixing ecosystems is a big job creator. It calculates that 500 000 jobs could be created “if the prevailing environmental challenges are to be addressed more actively”. Spekboom is a small but integral part of that future.

Overseeing this future is the environment department’s Dr Christo Marais, head of its chief directorate for environmental protection and infrastructure programmes.

Forever visiting projects, he is a difficult man to contact. An initial email gets the response: “The thicket project is still very much alive.” A call follows. “We have problems with the deadly sins that bring fatalities [to spekboom]: frost, drought and grazing. But things are looking good.”

Without the backing of lucrative carbon credits, Marais spends his time convincing farmers that fixing ecosystems makes sense — in this instance, more water, particularly underground. But that’s water that you cannot see, he says. “A farmer wants to see his dam and see that there is water in that dam.”

The current drought has helped his argument, as have the valleys where rehabilitation has meant once-dry rivers now flow again. “Farmers talk. It’s a slow process because we are working with a small budget, but each example means more people get interested in fixing their local ecosystem.”

That could be given a huge boost should the South African carbon market take off. Taxed at R120 a tonne on carbon emissions, companies could invest in projects such as spekboom. With 500-million tonnes of carbon emitted each year in South Africa, the treasury has said the potential for stimulating local projects is big.

But the tax is being blocked by companies and government departments that say it would lead to factories closing and job loss.

Because of this, spekboom’s potential to improve local ecosystems dramatically, provide jobs and slow global warming will remain just that — a potential.

South African business and industry is taking  steps towards mitigating the impacts of the proposed carbon tax legislation on their operations and investments.

Rather than viewing the carbon tax as potentially increasing costs, Climate Neutral Group will help you find opportunities to drive innovation and to develop creative ways to implement efficiencies.

One of our services is Carbon TaxCoach which helps companies to decrease their future carbon tax as well as developing a robust carbon tax offset purchase strategy.

Would you like to know more about our carbon tax solutions, click here  and for more information contact Franz Rentel on franz.rentel@climateneutralgroup.com

The Peninsula Offsets Conferencing Carbon Footprint

Posted by: TourismTattler, 24 April 2017

With a drive and passion for saving the planet, The Peninsula All-Suite Hotel is dedicated to improving the health conditions and quality of life of families less privileged throughout South Africa by providing them with a simple cooking device – The Wonderbag. Header image credit: Climate Neutral Group.

The Wonderbag is a revolutionary non-electric heat-retention slow cooker that continues to cook food that has been brought to the boil for up to 12 hours without the use of additional fuel or electricity.  It provides communities with greener, safer and more reliable energy to cook their everyday meals.

As a solution to offset the carbon emissions generated through the Peninsula’s meeting rooms and conference facilities, caused by the need for lighting, cleaning, catering, heating, cooling and travelling, for every conference booked the Peninsula will donate Wonderbags to families in need through the Climate Neutral Groups Green Dreams project.

In doing so they are not only neutralising and reducing their carbon footprint but significantly contributing towards the life conditions of vulnerable communities across Africa, empowering them to progress by creating a safer and healthier environment.

Carbon Credits

The Wonderbag project is registered under the Verified Carbon Standard (VCS), thereby allowing companies to credibly offset their carbon emissions whilst making a sustainable social impact in South Africa. The Wonderbag’s environmental impact is measured and monitored by internal and external researchers and audited by independent auditors as required by the VCS guidelines.

The Peninsula All-suite Hotel is managed as a professional and environmentally conscious business and will continue to identify areas of opportunity to decrease their carbon footprint and bring forward change. They will stock the Wonderbag at the hotel to guests or conferencing delegates who wish to make a difference.

Would you also like to offer climate neutral conference facilities at your hotel? Click here for more information or contact Nishanthi Lambrichs at nishanthi.lambrichs@climateneutralgroup.com

Implications of new Greenhouse Gas Reporting Regulations for business

This article was published on the 13 of April on www.bizcommunity.com

By: Simon Clarke, director, IBIS Consulting, 13 April 2017

After being in draft format for nearly two years, the National Greenhouse Gas Reporting Regulations were published by the minister of Environmental Affairs on 3 April 2017. This briefing document provides a short summary of part of the regulations and highlights what we believe to be some of the key issues for business.

Download the full regulations here.

South Africa is undoubtedly moving to some form of carbon pricing regime. The timing and format (carbon tax, carbon budget or combination thereof) is still unknown, but the greenhouse gas (GHG) data reported to government as part of these regulations will form the basis for this carbon pricing regime. Companies impacted by the legislation therefore need to make sure their data is accurate and complete as it will have financial implications.

Few changes have been made to the final regulations so there should be no major surprises. But for companies that have not been following the draft regulations, there are some important considerations that are outlined below.

Reporting boundaries. Companies must define their reporting boundaries based on operational control, defined by the regulations as “the full authority to introduce and implement its operating policies at the company”. For companies that have been using the GHG Protocol Corporate Accounting and Reporting Standard for reporting of their GHG emissions historically and have adopted a slightly different approach, either financial control or equity share, this will need to be addressed.

Inclusion / exclusion of certain emissions. The regulations require companies to exclude emissions from mobile combustion (essentially emissions from vehicles) as well as emissions from purchased electricity and refrigerants. Emissions from waste and waste-water treatment are included (provided you exceed the threshold – see the point below on thresholds). If your current GHG emissions inventory is not set up to include or exclude these sources, you may well end up over or under-reporting your emissions.

Emission factors and methodology. The regulations refer to the “Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories (2006)” as the basis for calculating emissions. These guidelines have been translated for South African companies into a slightly easier format by the Technical Guidelines for Monitoring, Reporting, Verification and Validation of Greenhouse Gas Emissions by Industry (hereafter referred to as the Technical Guidelines). To understand the reporting requirements properly, the regulations and the Technical Guidelines must be read together. The most important methodological considerations are:

  • The emission factors to be used must be in line with the IPPC requirements and are mostly provided in the Technical Guidelines. For companies that previously relied on the UK government’s DEFRA as a source of emission factors, this will need to change. There are also South African specific emission factors for certain fuels, such as diesel and petrol, which companies must be aware of.
  • Companies must report their GHG emissions for carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) separately. Global warming potentials (GWP), which are a measure of how much a GHG contributes to global warming relative to CO2 for these gases, are also specified in the regulations and must be sourced from the IPCC Third Assessment Report.
  • The IPCC Guidelines divide emissions into four main categories, termed sectors (which are Energy, Industrial Processes and Product Use (IPPU), Waste and Agriculture, Forestry and Land-use (AFOLU)), which are further divided into several sub-sectors. Companies will need to determine which sector and sub-sector their emissions fall into.
  • The IPCC Guidelines provide several options for calculating the emissions, described as tiers. There are three levels of tiers: one, two and three. Each tier has an associated increasing level of detail and accuracy, with the tier three method requiring the most accurate approach. The regulations specify which tier to use, usually either tier two or three.

Thresholds per source category. The regulations provide thresholds per emission source, above which companies are required to report. In the energy sector this is typically 10MW for the energy sources, and varies for other categories (e.g. five tonnes of waste per day for waste disposal sites and 4-million bricks per month in the brick manufacturing sector). For most companies, the most important part of this is that the 10MW refers to the design capacity and not how much fuel you consumed. In addition, it is not linked to one piece of equipment larger than 10MW. The regulations provide an example of six 2MW boilers, equating to 12MW, that would then exceed the threshold. Interestingly, this approach may require a company with a number of sites with back-up generators to trigger the 10MW threshold, even if no diesel was consumed for that year in those generators.

Calendar year. Reporting needs to be done on a calendar year basis. For companies whose financial year does not end in December, this will require a good system to cater for this requirement.

Timing. The regulations don’t explicitly state this but it is expected that companies will need to report their 2017 data by March 2018. As an aside, the Department of Environmental Affairs is asking companies, through their industry associations, to provide historical data so that the National GHG Inventory is more complete.

Registration. Companies will need to register their company and the facilities that exceed the threshold on the South African National Atmospheric Emission Inventory System (NAEIS) which will serve as the reporting portal for GHG data. Note that the GHG module on the NAEIS is not functioning yet but it is understood that this will be ready by March 2018. The regulations require facilities to register within 30 days of publication of the regulations. Although companies are required to register the facilities that exceed the threshold, it is our understanding that because reporting is done per IPCC category, facility level reporting is not mandatory. This allows for companies with multiple sites to consolidate their data. For example, the six sites with 2MW boilers could then report emissions from coal (assuming they are all coal-fired boilers) collectively under a single line item in the NAEIS.

Validation and verification. The regulations don’t require verified data, but if the competent authority deems the data to not be transparent, complete or correct, they may undertake on-site verification and validation which the company will be responsible for paying for.

What actions should you take?

Companies must register and familiarise themselves with the NAEIS and ensure they are ready to report by March 2018. Many companies have been reporting their GHG emissions data for a number of years so the transition to mandatory reporting should be relatively straightforward. However, it is important that your GHG inventory is set up to allow for:

  1. Clarity on your boundary approach, focused on operational control for mandatory reporting.
  2. Disaggregation of emission sources (e.g. mobile and stationary combustion) per facility.
  3. Transparency on emission factors and GWPs and the ability to easily change these. The IPCC Guidelines and the Technical Guidelines must be consulted in this regard.
  4. Ability to easily include or exclude emission sources (e.g. exclusion of emission from electricity for mandatory reporting but inclusion for voluntary reporting).
  5. Clarity around design capacities of fuel combustion equipment.
  6. Monthly data capture and reporting, particularly for companies with financial year-ends that are not in December.
  7. Verification of your GHG data. It is recommended that this is conducted by an organisation that understands the requirements of the IPCC Guideline.

Would you like to asses your carbon footprint, click here for more information or contact Franz Rentel on franz.rentel@climateneutralgroup.com

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Emissions offsetting: closing the main carbon tap of your business

By Danielle de Bruin, Programme Manager Mobility / Climate Neutral Group in The Netherlands

A car leasing company called us recently with a query around sustainability and transport. “We are not offsetting emissions because we think prevention is better” was one of the statements. Upon concluding our telephone conversation, during which we agreed on many points, one issue lingered on.

Prevention is better than offsetting: is that true? To find an answer, we will need to look at two things:

1. Can companies prevent climate change just by reducing their carbon emissions?

The answer is no. Reducing emissions is not enough. Of course, every little bit helps and lowering your overall emissions from your fuel consumption and energy use is something you should definitely do. This is however not where it ends.

After all, if your kitchen is flooding because you have left the tap open, you must close the tap and mop the floor. By reducing your company’s fuel and energy consumption, thus carbon footprint, you are closing your carbon emission tap only a little, say by up to 20%, if you are doing everything right.

The problem is that you can’t ignore the remaining 80%. A transition to electric transport could be a structural solution, but it could take many years before we reach that point. Do we have time to wait for this? I don’t think so. You can’t say: “I am sorry your kitchen is flooded. I will return next month to close the tap.”

2. Is there a difference between reducing emissions and offsetting?

The answer is no. Please allow me to explain why.

In the Netherlands, our infrastructure is largely based on fossil fuels. We fill up our cars with petrol and diesel and the bulk of our electricity is generated from coal. We all know how much effort it takes to change this: coal plants aren’t after all easily closed. In essence, we are all on the fossil fuel highway together, whilst making hairpin bends towards a more sustainable economy. Meanwhile, dozens of emerging markets around the world are developing rapidly, and are embarking on a similar path as the developed world a good few years ago. These countries will have to make the same hairpin bends in 20 years’ time to get rid their fossil fuels.

What is offsetting all about?

Offsetting means investing in sustainable energy projects in countries which are developing at a fast pace to prevent reliance on fossil fuels. One can, for instance, invest in wind turbines in India. With this, you are investing in clean, sustainable electricity grids from the word go – preventing emerging economies from becoming dependent on fossil fuels.

In other words, does offsetting equal reduction?

The answer is: yes. Offsetting is much more than closing the tap or mopping the floor. Offsetting your emissions means you are aware of the fact that greenhouse gases originate from several taps and that you have to close the largest, not just the most obvious. We essentially all benefit from offsetting.

The following day, I called the lease company and explained the above. The result? The firm in question is now one of our clean transport ambassadors in The Netherlands, and it is persuading their clients to offset their emissions. What about you?

The above is applicable to South Africa. Please contact us to see how your company can start reducing and offsetting its carbon emissions.