SC(3) CR-I&PB3

Sustainability Committee

Inquiry into Carbon Reduction in Wales: Carbon Reduction by Industry and Public Bodies

Response from the Carbon Trust in Wales

General Questions

1 Question

Is the proposed 3 per cent annual reduction target by 2011 'in areas of devolved competence'1 sufficient to enable Wales to make its full contribution to meeting UK-wide targets? If not, what targets should be put in place?

Answer

The 3% annual reduction Target by 2011 in areas of devolved competence is ambitious but achievable. By working together in a co-ordinated manner organisations across Wales can help achieve major savings.

The target could be achieved through the implementation of energy efficiency best practice, the development of low carbon technologies and utilisation of sustainable and renewable energy sources which will move Wales towards the low carbon economy.

2 Question

Should the emission reduction target be based on Welsh consumption, or production, or both (ie should it take into consideration the carbon dioxide generated in Wales (production), or the carbon dioxide emissions that Wales' residents are responsible for, regardless of their source (consumption))?

Answer

Any targets set need to address area over which Wales has influence. We need to access the current position and then put in place realistic measures to achieve our goals.

The Carbon Trust has carried out a Wales Energy and Carbon Emissions Study over the past three years. This study considers emissions from an end user perspective. Through this approach it is possible to estimate the carbon dioxide emissions resulting from the energy use at the point of consumption. Welsh industry is very large, and we have over twice the per capita carbon emissions of the UK. We account for just over 6 per cent of the UK population, but we have over 12 per cent of the UK’s industrial carbon emissions. This is due to our inherited, high-energy-intensive industries. We have the aluminium, steel, coal, food, drink, paper, cement, glass and chemicals industries, as well as 17.5 per cent of the UK’s oil refining capacity, in Pembrokeshire.

Evidence from the Assembly Government website suggests that the turnover of large energy-intensive industries such as iron and steel has increased since 2003-04. Our Wales energy and carbon emissions study came up with the same picture.

We look at carbon emissions Wales is specifically responsible for as the point source of energy consumption. So, we take into account all agricultural, transport, domestic, public sector, and industrial emissions within Wales. The format of that has been formulated in conjunction with the Welsh Assembly Government, and we feel that it is fair to do that—to provide the information on all sectors so that it is a benefit to all organisations within Wales, and so that it helps us to move forward, working together in a structured way to reduce carbon emissions.

3 Question

What particular challenges does Wales face in reducing carbon dioxide emissions from industry and public bodies, and how can these challenges be overcome?

Answer

Welsh industry is very large, and we have over twice the per capita carbon emissions of the UK. We account for just over 6 per cent of the UK population, but we have over 12 per cent of the UK’s industrial carbon emissions. This is due to our inherited, high-energy-intensive industries. We have the aluminium, steel, coal, food, drink, paper, cement, glass and chemicals industries, as well as 17.5 per cent of the UK’s oil refining capacity, in Pembrokeshire.

Our 22 local authorities are also diverse from metropolitan to rural.

Through working together in a co-ordinated approach we can make significant headway I the area of climate change.

The most progress is only made where there is buy in at the highest level with any organisation so that change can be driven through the whole company.

Continued support is needed to ensure that the decision makers within organisations are well informed with regard to the whole range of products available within Wales such as Carbon footprint assessment, carbon management and energy efficiency. This is not just to aid identification of opportunities and target setting but also the ability to assist with the implementation of successful emission reduction measures.

Support in the area of technology development is also extremely important to assist in the move towards the low carbon economy. Whilst great strides are being mad in the efficiency arena, Wales should not be left behind in the area of development of low carbon technologies through lack of investment.

4 Question

Do the current Welsh Assembly Government economic development policies give sufficient emphasis to carbon reduction?

Answer

The Welsh Assembly Government was one of, if not the first government to include sustainability within all its areas of influence. Under the one Wales document agreed by the coalition government. The Assembly Government will aim to achieve annual carbon reductions of 3% per annum by 2011 in area of devolved competence. Welsh Assembly Government economic development policies are targeted to facilitate this aim whilst addressing the other social and economic needs of Wales.

5 Question

To what extent has the Welsh Assembly Government been successful inutilising the powers available to it in order to reduce carbon dioxide emissions from industry and public bodies?

Answer

The Welsh Assembly Government has been successful in raising awareness in all sectors of business, public sector and domestic sectors through their sponsorship of delivery bodies.

Success in the implementation of real auditable emissions reduction measures has been achieved consistently as demonstrated in appendix 1.

6 Question

Could alternative targeting of Welsh Assembly Government financial resources lead to greater emissions reduction from industry and public bodies than is currently being achieved? If so, where could additional resources lead to greatest impact? (Please provide detail to support your evidence).

Answer

The Carbon Trust Solutions activity delivers both practical carbon emission reductions and cost savings to Welsh business and public sector. In 2006/7 as a result of our assistance emissions were reduced in Wales by 126thousand tonnes of CO_2. This equates to a cost saving for business and public sector organisations we have worked with of £14m to £22m per year. Our savings have been reviewed by KPMG and we gained assurance over the results we reported for 2006/7. We continue to develop our activities in this area and will remain in close contact with your officials about developments in our offerings to small and medium businesses and an accreditation scheme that will recognise the work of companies and public bodies to reduce their carbon emissions.

Developing new low carbon technologies is a crucial area for the Welsh Assembly Government’s economic development and climate change mitigation objectives.

The NAO recently confirmed that our activities in this area offer cost effective support and that our research and technology accelerators are particularly well designed to overcome barriers. Our activities in this area complement the Welsh Assembly Government’s own offerings, and make a material contribution to your objectives. Recent examples of this work that offer significant benefits to Wales include:

• Projects such as our Advanced Metering and Micro CHP trials have delivered invaluable insights for Welsh policy makers;
• Our other Technology Acceleration projects such as those in Biomass Heat and Marine Energy are overcoming barriers to the commercialisation of technologies that are particularly relevant to Wales;
• Carbon Trust Enterprises creates new low carbon businesses which aim to overcome market failures and deliver significant carbon emission reduction and wealth creation opportunities in Scotland; and
• Carbon Trust Investments has developed a strong reputation in the market and is seen by many as a co-investor of choice.

As awareness of the implications of climate change as a business issue increases and both private companies and public sector organisations increasingly embrace commercially available emission reduction technologies, more support is needed in the delivery of solutions based support to implement measures currently available using today’s technology as well as investment in the development of the low carbon technologies of tomorrow.

7 Question

What examples from other administrations (devolved, UK, and overseas), where other means have been used to achieve reductions in carbon dioxide emissions from industry and public bodies, could be adopted in Wales under current powers?

Answer

The Carbon Trust is a private company set up by government in response to the threat of climate change, to accelerate the move to a low carbon economy by developing commercial low carbon technologies and helping organisations reduce their carbon emissions. The Carbon Trust works with UK business and the public sector through its work in five complementary areas: insights, solutions, innovations, enterprises and investments. Together these help to explain, deliver, develop, create and finance low carbon enterprise.

The Carbon Trust is funded by the Department for Environment, Food and Rural Affairs (Defra), the Department for Business, Enterprise and Regulatory Reform (BERR), the Scottish Government, the Welsh Assembly Government and Invest Northern Ireland.

For more information on the Carbon Trust visit www.carbontrust.co.uk or call the Carbon Trust Advice Line on 0800 085 2005.

8 Question

In the context of the Government of Wales Act 2006, which further means of reducing carbon dioxide emissions from industry and public bodies could only be achieved with the introduction of further legislative competence for the National Assembly for Wales.

Answer

The Assembly Government will aim to achieve annual carbon reductions of 3% per annum by 2011 in area of devolved competence.

One element of this aim is that all new buildings, over which the Welsh Assembly has influence, will be zero carbon by 2011. It would be beneficial if the areas of devolved competence necessary to achieve this were attained.

9 Question

If specific carbon dioxide emissions targets are to be set for Wales, should those targets be subdivided into shares by sector? If so, what share of the total should reductions by industry and public bodies comprise?

Answer

Before any specific targets are set, there needs to be a clear evaluation of the current position and a definitive base line derived. Evaluation in the future would need to take into account the Welsh Assembly Government economic development goals to aid accurate evaluation of emissions per unit growth in each sector. Many of our larger industries operate in a global market and the production levels will vary in relation to global demand. All of these factors need to be incorporated before any concise targets can be set.

10 Question

How will the Carbon Reduction Commitment affect your business? Should the proposed Commitment be amended in any way?

Answer

Effectively, this scheme strengthens the incentive to improve energy efficiency and carbon management skills, particularly in relation to metering and reporting. It will also help to focus senior management attention on the issues. The scheme will strengthen many companies’ Corporate Social Responsibility (CSR) driver to reduce carbon emissions and improve transparency of company performance.