July 20 Newsletter

July 20 Newsletter 12th July 2020

Streamlined Energy & Carbon Reporting

The UK Government recognised that multiple energy efficiency policies creates complexity and add burden to consumers. Therefore, in 2016 the UK government announced that it would consult on a simplified energy and carbon reporting framework for introduction by 2019.

As a result, the CRC Energy Efficiency Scheme came to an end, the financial cost of the Climate Change Levy on energy supply increased and the Streamlined Energy & Carbon Reporting (SECR) scheme was introduced to provide “decision-useful” dis-closure of energy and carbon emissions information in mainstream financial reports.

The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 came into force on 1 April 2019 and will ensure transparent mandatory carbon footprinting across business to assist in driving carbon reduction to Net Zero by 2050. This legislation applies to Companies, Limited Liability Partnerships and Charitable Trusts.

Whilst the Public Sector are generally excluded from the requirements of SECR, any organisation of sufficient scale that files annual reports to Companies House e.g. Multi-Academy Trusts, are included in SECR.

For SECR the minimum reporting requirements are:

  • UK energy use footprint (as a minimum gas, electricity and transport)
  • Greenhouse gas footprint derived from energy use
  • Comparison to previous year’s for energy use and GHG emissions (not for the first year)
  • Carbon intensity ratio (at least one)
  • Energy efficiency actions taken (during year)
  • Methodology used for SECR calculations and disclosures.

The Government is committed to delivering it’s commitment of Net Zero by 2050 across all sectors of the economy and SECR will bring transparency to carbon emissions across   business. It combines with ESOS and a wide range of other regulations and incentives to drive energy efficiency.

If you would like to discuss your SECR requirements, please contact us 0n 01384 397777 or info@briarassocites.co.uk and we will be pleased to provide advice.

Current Market Position

Lockdown’s eased across Europe and the UK With Non-essential businesses returning to operation on the 15th June and with much of Europe already ahead of the UK in lifting restrictions, demand for gas and power has seen a partial recovery helping to support prices up.

EUA Carbon permits have strong month of trading European carbon permits have been steadily and continually rising this month to see a 32% increase in value from the start to the end of the month, which is a significant value increase and heavily impacts the cost of power generation. EU carbon permits have seen their value increase off the back of data suggesting EU economies could recover much faster than expected after the pandemic.

LNG schedule sees big reduction Oversupply and a price collapse has led to huge drop of LNG cargo arrivals into the UK with arrivals in the single figures this month. A natural reduction is to be expected during the summer months with demand for natural gas lower, however Corvid-19 has exacerbated this. The UK is now much more reliant on flows from Norway and mainland Europe with the loss of security from LNG pushing up prices.

Brent crude oil breaks $40/barrel barrier Like carbon, oil has been steadily increasing throughout the month to break the $40 barrier. It has been supported with an increase in demand and OPEC+ cuts continuing to take place. It’s sentimental link to gas and power has pushed up prices on the far curve.