Carbon Legislation and Energy Use
Overview
The UK has set a climate target for the year 2050, to achieve net zero greenhouse gas emissions. In order to meet this target it is important to ensure energy security. In the UK energy use is covered by key acts which promote, renewable energy, efficient energy consumption and low carbon energy sources. The article will highlight and summarise the following:
- Climate Change and Sustainable Energy Act 2006
- European Communities Act 1972 (Eco-Design Regulations)
- Energy Act 2023
- The Energy Saving Opportunity Scheme Regulations 2014 (ESOS)
This article will give you insights on what to include in your ISO carbon register, which you may have for your ISO 14001 and ISO 50001 standards.
Climate Change and Sustainable Energy Act 2006
The Climate Change and Sustainable Energy Act 2006 was one of the early pieces of legislation aimed at boosting the uptake of renewable energy and improving energy efficiency in the UK. The Act supports the broader objectives of the UK’s climate change strategy by encouraging local initiatives and small-scale energy generation, also known as microgeneration. Microgeneration is the production of heat and electricity on a small scale, from low carbon sources. The Act highlights a number of different technologies which provide heat and electricity to homes, communities and small commercial premises. The Act requires the Government to assess whether targets were appropriate for new targets to be set out alongside a microgeneration strategy under the Energy Act 2004.
Impacts on businesses under the Climate Change and Sustainable Energy Act 2006 include:
- Local authorities are mandated to consider energy conservation in their areas and promote renewable energy production, which includes microgeneration technologies.
- Utilities are required to promote the reduction of greenhouse gas emissions and wider use of heat produced from renewable sources.
- Gas suppliers need to focus on reducing carbon emissions and improving energy efficiency.
- The Act also imposes duties on public sector bodies to enhance energy efficiency and use of sustainable energy.
European Communities Act 1972 and the Ecodesign for Energy-Related Products Regulations 2010
The European Communities Act 1972 sets out powers for ecodesign regulations to be established. The main aim of ecodesign initiatives is to connect the economy and the environment. Ecodesign strives to reduces waste within production and minimises the carbon footprint of products and services.
Through this Act several statutory instruments have been made throughout the years. These include the Ecodesign for Energy-Related Products Regulations 2010, as well as its’ subsequent amendments. These Regulations set out restrictions on manufacturers, stating that they cannot put goods on the market or into service unless the product is compliant and has the correct UK markings.
Impacts on businesses under the Ecodesign for Energy-Related Products Regulations 2010 include:
- Manufacturers must assess whether they have complied with the correct implementing measures.
- If they do comply they must make a declaration of conformity.
- They must ensure that the eco design markings are visibility, legibly and indelibly to the product, the packaging or documentation which accompanies the product.
Energy Act 2023
The Energy Act 2023 is a comprehensive piece of legislation aimed at securing energy supply, reducing demand, and supporting the transition to low-carbon energy sources. The Act builds on previous legislation by introducing measures that facilitate the development of carbon capture, usage, and storage (CCUS), and the expansion of nuclear energy as part of the UK’s energy mix.
Impacts on businesses under the Energy Act 2023 include:
- Businesses in the energy sector are required to participate in the emissions trading scheme or meet standards for carbon capture and storage.
- New reporting requirements for large energy projects, focusing on environmental impact assessments and adherence to sustainability criteria.
- Increased regulatory oversight on energy security and infrastructure resilience.
It is important to note that amendments to this Act, through the Energy Act 2023 (Consequential Amendments) Regulations 2024, form part of the programme through the Department for Energy Security and Net Zero, reforming gas and electricity industry codes and creating the National Energy System Operator (NESO), a publicly owned corporation that are granted responsibilities to oversee the national energy system, promoting net zero, energy efficiency and energy security.
The Energy Savings Opportunity Scheme Regulations 2014 (ESOS)
The Energy Savings Opportunity Scheme Regulations 2014 (ESOS) aims to improve energy efficiency in large enterprises by requiring them to regularly audit their energy use. The scheme is part of the UK’s response to meeting EU energy efficiency directives and supports the broader objective of reducing overall energy consumption.
Impacts on businesses under ESOS include:
- Large enterprises (those with at least 250 employees or annual turnovers exceeding €50 million and an annual balance sheet total over €43 million) must conduct comprehensive energy audits every four years.
- These audits must cover at least 90% of total energy consumption, including buildings, industrial processes, and transportation.
- Companies must report compliance to the Environment Agency, including evidence of energy savings and plans for future efficiency measures.
Any qualifying organisations need to complete an ESOS assessment, meaning they need to:
- measure total energy consumption;
- identify areas of significant energy consumption (if relevant);
- calculate your energy intensity ratios;
- consider available routes to compliance;
- ensure areas of significant energy consumption (or total energy consumption if you have not identified areas of significant energy consumption) are covered by a route to compliance;
- appoint a lead assessor (unless you have zero energy, use less than 40,000 kWh of energy or have ISO 50001 energy management system which covers 100% of your total energy consumption);
- carry out energy audits for any areas of significant energy consumption not covered by an alternative compliance route;
- complete the ESOS report;
- share the ESOS report, and any relevant documentation relating to alternative compliance routes, with group undertakings;
- get one or more board level directors to review the findings of the assessment;
- submit an ESOS compliance notification through the online notification system; and
- keep a record in your evidence pack of the ESOS compliance notification, a copy of your ESOS report and any other records of the assessment.
There are altered requirements for companies who already comply with ISO 50001 – they do not need to calculate overall energy consumption for the first and second compliance periods, they only need to:
- Get board level director confirmation; and
- A submission of compliance notification.
For the third compliance period they need to calculate total energy consumption for an energy intensity ratio.
Conclusion
The scope of the UK’s carbon legislation, as illustrated by these acts and regulations, underscores a robust and evolving framework aimed at achieving the 2050 emissions target. Each piece of legislation not only addresses different facets of energy and environmental management but also sets specific compliance obligations for businesses, driving them towards more sustainable practices. As the UK continues to refine its legislative approach, the integration of these laws will play a critical role in shaping a sustainable, low-carbon future. It is crucial that UK businesses stay aware of their compliance obligations in this ever-changing legislative landscape.
