UK & EU Climate News

• Continued delays to the updated climate change plan and further slippages in promised climate policies mean that the UK Climate Change Committee (CCC) no longer believe that the Scottish Government will meets its statutory 2030 goal to reduce emissions by 75%. The CCC reports that there is no comprehensive strategy for Scotland to decarbonise towards Net Zero. The Scottish Government delayed its draft Climate Change Plan last year despite the 2030 target only being six years away. This has left a significant period without sufficient actions or policies to reach the target, the required acceleration in emissions reduction in Scotland is now beyond what is credible. Scotland missed its annual target for 2021 which is the 8th time in the past 12 years they have missed a target. The only sectors to reduce emissions in 2021 were electricity supply and industry. Most key indicators of delivery progress, such as tree planting, peatland restoration rates and heat pump installations are off track.

• The EU Commission is finalising proposals that would ‘severely weaken’ environmental requirements for EU farmers, ending the requirement to promote biodiversity making it and other measures voluntary. The dramatic policy reversal follows weeks of protests around Europe by farmers who claim that environmental red tape is destroying their livelihoods and placing European farmers on an unfair footing against farmers from other nations with poorer environmental and animal welfare standards. This story is covered extensively in Politico.

• Germany’s greenhouse gas emissions dropped by 10% in 2023 or 76m tonnes (Mt), marking the sharpest decline since 1990. These projections detailed in a report by the Federal Environmental Agency (UBA) indicate that Germany is approaching its climate targets which aim for a 65% reduction in emissions by 2030 compared to 1990 levels. With an expected reduction of nearly 64% according to the UBA, Germany is on track to achieve its 2030 climate goals.

Global Climate News

• Singapore will implement mandatory climate-related reporting requirements for listed and large non-listed companies, with obligations for some to begin disclosing in line with the IFRS’ International Sustainability Standards Board (ISSB) standards starting as early as 2025.

• Data centres are becoming some of the biggest consumers of water and energy, with artificial intelligence (AI) becoming a significant drain of natural resources. Data centres, cryptocurrencies and AI accounted for almost 2% of global power demand in 2022 and this could double by 2026 to match the electricity consumption of Japan, according to the Financial Times. Despite this, AI could concurrently help ease the transition to clean energy, such as a reduction of energy usage through AI modelling. AI could play a useful role in tackling climate change and needs to be seen as part of the solution - not part of the problem.

• Big businesses have been accused of undermining net-zero commitments with excessive air travel. An analysis of climate strategy of more than 300 big businesses conducted by the NGO Transport & Environment has revealed that 4 in 5 have no target to cut travel emissions, despite most of them having publicly articulated a net-zero target for 2050 or sooner. Offenders include Apple, Netflix, Microsoft and Coca-Cola.

• A new report from the International Energy Agency (IEA) finds that energy-related CO2 emissions increased to a record level in 2023, rising by 1.1%. However, this increase is a drop of 14% of the 2021-2022 increase. The report notes that growth slowed from the previous years thanks to continued expansion of clean technologies stating that ‘without clean energy technologies, the global increase in CO2 emissions in the past 5 years would have been three times larger’.

• Several publications including Bloomberg have covered the IEA annual methane tracker report, which says that global methane emissions from fossil fuels reached a near record high last year despite new international pledges to reduce them. While the analysis highlighted progress in some places, on the whole it suggests global oil, gas and coal producers and governments are falling short of promises to cut methane emissions, directly jeopardising global efforts to limit climate change. The fossil fuel industry must cut methane emissions 75% by 2030 according to the IEA, in order to be on pace for net-zero emissions in 2050, which aligns with the goals of the Paris Agreement’.

• The US National Oceanic and Atmospheric Administration (NOAA) reports that the world is on the brink of a fourth global mass coral bleaching event which could see many tropical reefs killed by extreme ocean temperatures. The NOAA note that it is looking like the entirety of the southern hemisphere will likely bleach this year. Triggered by heat stress, coral bleaching occurs when corals expel the colourful algae living in their tissues. Without these helpful algae, the corals become pale and are vulnerable to starvation and disease. Meanwhile scientists in Australia have confirmed that aerial surveys of the Great Barrier Reef shows that two-thirds of the habitats reefs shows signs of bleaching, the Sydney Morning Herald reports.

• A study published in the journal Nature Reviews Earth and Environment from the University of Colorado Boulder in the US said the earliest ice-free September could occur in the 2020s to 2030s under all scenarios for the amount of greenhouse gases humans put into the atmosphere, and is likely going to occur by 2050. ‘Ice-free’ does not mean there would be no ice, but is defined by scientists as one where the average minimum cover is just 20% of what it was in the 1980s. Such conditions would have a host of impacts from increasing warming by reducing the heat-reflecting capacity of the white ice, coastal erosion, putting pressure on wildlife such as polar bears, causing new fish species to move into the Arctic Ocean and increasing human activity such as shipping.

1) Shell abandons 2035 emissions target

Shell have scaled back their carbon reduction goal for 2030 and ditched their 2035 target. Their newly-released ‘Energy Transition Strategy’ says they have ‘updated’ their target to cut the total net carbon intensity of all the energy products it sells to customers. They are aiming for as low as 15% by 2030, instead of 20%.

They are also ‘retiring’ their 2035 target of a 45% reduction in net carbon intensity due to ‘uncertainty in the pace of change in the energy transition’.

One of new boss Wael Sawan’s first major actions upon being appointed last year was to stop shrinking its oil production and announce the ramping up of its natural gas manufacturing.

Shell says they will grow their liquified natural gas business by up to 30% by 2030.

Shell made £21.9bn in profit last year.

2) US Election – what would a Trump victory mean for the climate crisis?

Analysis by Carbon Brief of an aggregation of modeling by various US research groups has found that a victory for Donald Trump in November’s presidential election could lead to an additional 4bn tonnes of US emissions by 2030, compared with Joe Biden’s plans. This extra 4bn tonnes of carbon dioxide equivalent (GTCO2e) by 2030 would cause global climate damages worth more than $900bn, based on the latest US government valuations.

For context, 4GTCO2e is the equivalent to the combined annual total of the world’s 140 lowest-emitting countries, or the combined annual emissions of the EU and Japan.

Put differently, this extra 4GTCO2e would be equivalent to double all of the emissions savings secured globally over the past five years by deploying solar, wind, electric vehicles, nuclear and heat pumps and other renewable technologies.

The findings are subject to uncertainty around economic growth, fuel and technology prices, the market response to incentives and the extent to which Trump is able to roll back Biden’s policies.

Equally, it might understate Trump’s impact. For example, his pledge to “drill, baby, drill” is not included within the analysis and would likely raise US and global emissions further through the increased extraction and burning of oil, gas and coal.

Also not included are the potential for Biden to add new climate policies if he wins a second term, nor the risk that some of his policies will be weakened, delayed or hit by legal challenges.

Regardless of the precise impact, a second Trump term that successfully dismantles Biden’s climate legacy would likely end any global hopes of keeping global warming below 1.5C.

3) Corporate Sustainability Due Diligence Directive (CSDDD)

After much contentious debate between different countries, nations representing >65% of the EU’s population have endorsed the CSDDD, moving it to a final vote in the EU parliament.

Whilst the law has been weakened in a few key ways including the delayed phase in for most companies and the scope of applicability being refocused initially on the largest firms (those with revenue greater than €450 million and 1000 employees, up from €150 million and 500 employees), this is nonetheless a big win.

The CSDDD requires companies to identify, assess, prevent, mitigate, address and remedy impacts on people and planet – ranging from child labour to carbon emissions and from pollution to biodiversity losses. Notably firms must consider their upstream supply chain and some downstream activities as well such as distribution and recycling. There are some 5,300 businesses operating in the EU which will meet the revised CSDDD criteria.

The CSDDD was initially proposed by the EU Commission in February 2022.

4) EU Directive on Green Claims

The EU parliament voted to approve the Directive on Green Claims, a series of rules to protect consumers from greenwashing and requiring companies to submit certain environmental claims for verification.

It’s a win for information, transparency and impact!

Below is a helpful overview of the proposed elements of the Directive:

Substantiating

• Adopt a life cycle approach (from raw materials to end of life) and use widely recognised scientific approaches and evidence when calculating environmental impacts and overall environmental performance of a product or organisation.
• Identify and include environmental impacts that contribute significantly to overall environmental performance in the analysis. Ensure any environmental trade-offs are included in the analysis. Examples may include CO2 emission savings in the manufacturing stage leading to CO2 emission increases in the use phase, and water consumption savings leading to increases in greenhouse gas emissions in the manufacturing stage.
• Base any comparisons with other products and organisations on equivalent information and data.
• Review and update any data and information used in the analysis at least every five years.
• Only use environmental labels that are transparent, independently verified and regularly reviewed.

Communicating

• Only state the environmental impact(s) that has [have] been analysed in the claim’s substantiation.
• Ensure information and data used to substantiate the claim are made publicly available, via weblink QR code or equivalent. This includes underlying studies calculations and assumptions.
• Do not use environmental labels or scores that aggregate environmental impacts.
• State the extent to which climate-related claims are based on carbon offsets an describe the integrity of these carbon offsets.

Verifying

• Check environmental claims via an independent competent and accredited third-party verifier who can then issue a certificate of conformance.
• The verifier shall be a third-party conformity assessment body that has been accredited in accordance with Regulation (EC) No 765/2008 on the requirements for accreditation relating to the marketing of products.

5) Building energy efficiency directive looms closer to sign-off.

Buildings account for around one-third of the EU’s annual energy consumption and the operation of buildings generates just under 30% of the bloc’s annual greenhouse gas emissions.

In a bid to tackle these emissions while also improving public health, the EU has been progressing an Energy Performance of Buildings Directive to mandate energy efficiency improvements and onsite solar.

The Directive will require each EU member state to reduce the energy use of residential buildings by 20%, against a 2020 baseline. 55% of the gains must come from the bottom 43% of worst-performing buildings. There are also requirements for the worst 26% of offices and schools to be improved by 2033.

Additionally, member states must axe any subsidies for fossil-fuelled heaters by the start of 2025 and should mandate solar panels on the roof of new houses.

There is some disappointment that the law will place responsibility on individual nations rather than having a centrally managed body. The EU Council will now need to officially approve the text.

6) UK Spring budget 2024: Key climate and energy announcements

UK chancellor Jeremy Hunt failed to mention the term ‘climate change’ at all when setting out the government’s spring budget. Here’s a brief round-up of the key climate and energy announcements:

• As anticipated, Hunt announced in his budget speech that the government will continue to freeze fuel duty on petrol and diesel, marking the 14th consecutive year of this policy. As of 2023, this policy has added up to 7% to UK emissions, according to previous analysis;
• Additionally, the chancellor extended the windfall tax on oil and gas companies for another year but did not specify plans for utilizing the revenue for new climate-focused investments.
• Notably, there were no new initiatives introduced to support the adoption of key low-carbon technologies like electric vehicles and heat pumps.
• Hunt also affirmed the government's commitment to maximizing oil and gas production without proposing further changes.

Despite some additional funding for supply chains, analysts criticized the budget for missing an opportunity to bolster low-carbon industries and expedite the transition away from fossil fuels in the UK. Alongside the budget announcement, details of the government's sixth auction round for renewable energy projects were confirmed, with a fund exceeding £1 billion.

7) International real estate investors shunning UK for nations with stronger green policies.

New research published on 20 March by the UK Sustainable Investment and Finance Association (UKSIF) surveying 100 decision-makers at businesses with investments in the UK housing sector has found that only 15% of UK real estate companies place the UK as the top market for sustainable investment.

This could total up to £31bn of private investment this decade.

Almost two-thirds (63%) of those polled are primed to reduce investment in the UK and re-allocate it abroad, in markets which are more supportive of their sustainability goals and are more attractive for low-carbon new buildings and/or retrofitting existing homes.

Two in five said that accessing private capital for low-carbon projects remains challenging in the UK, particularly for retrofitting.

The survey found that a particularly harmful policy change was Prime Minister Rishi Sunak’s decision, taken last September, to scrap forthcoming requirements for the landlords of private rented homes to improve their energy efficiency. The requirements would have entailed landlords needing to upgrade properties to achieve an EPC ‘C’ rating by 2028.

UKSIF’s research found that re-instating this commitment, but delaying the deadline to 2035, could placate landlord concerns and allow adequate time for delivery while still sending the right messages to investors. The mandate should also stipulate that landlords upload energy consumption data for public access, at least every three years.

UKSIF’s chief executive James Alexander said: “Investors are in desperate need of clarity from the government on sustainability policy, and only then can opportunities be unlocked for the UK housing sector, with benefits realised for consumers, the environment and the wider economy.

“Our research shows that there is huge demand from real estate companies and investors alike to invest in the UK, but policy reform and government measures to close the skills gap are critical if the UK is to avoid falling behind other countries in the race for capital.”

The built environment accounted for 17% of emissions in 2022, second only to surface transport when it comes to high-emitting sectors. The UK Government’s climate advisors warned last summer that 77% of the emissions reductions in the sector required to align with the Sixth Carbon Budget are not supported by credible policy.

Webinars

Edie webinar ‘Decarbonising Buildings: Making a net-zero built environment a reality’. Tuesday 9th April 14.00 – 15.00 GMT.

Discussion points:

• A whole lifecycle carbon approach to zero-carbon buildings: practical examples and insights
• Using technology and data to unlock decarbonisation
• The crucial role of collaboration across the built environment value chain
• Navigating retrofit risks: identifying the solutions that work

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