A few weeks ago, to prepare our free training on carbon emissions reporting, we sat down with Cristina Raventós, a senior consultant and Spain portfolio manager at Carbon Clear.
Carbon Clear specialises in carbon footprint calculation and the creation of sustainability and emissions reduction strategies. In this exclusive interview, Cristina helps us understand the state of the European market when it comes to carbon management (and the regulation of other greenhouse gases).
Carbon Management and Regulation in the EU
Cristina, Carbon Clear works in Spain and the UK, almost polar opposites in terms of regulatory environments despite being EU countries. What differences would you highlight?
CR – The most relevant difference between these two countries is really the moment they awakened to environmental issues. While the UK is considered a leader in greenhouse gas (GHG) mitigation, having the largest number of environmental laws in force in the world in 2011, Spain has always trailed one step behind the EU. For example, the UK Climate Change Act, in force since 2008, has allowed them to make significant changes to the country’s development system over the years, from climate change taxes to punishing companies that do not reduce their emissions. Emissions, which are used in full to support energy efficiency and low carbon technologies, to subsidised tariffs for renewable energy in the electricity market, or green housing contracts that allow consumers to make their homes more energy efficient at no additional cost…
Considering the EU has some of the most stringent environmental legislation in the world, Spain’s position on the environment at the legislative level makes sense. The greatest problem comes when implementing and prioritising the changes required at national and state level, as the process can take years, significantly affecting the impact of these laws and, therefore, their introduction into commercial markets. In this sense, the difference is reflected in the types of services that are requested by businesses in Spain compared to those we serve in the United Kingdom.
Tell us a bit more about mandatory emissions laws in Spain
CR – In addition to those established by the European Union, all environmental policies in Spain are based on Article 45 of the Constitution, which governs “the right to enjoy an adequate environment for human development, as well as the duty to preserve it” by public authorities, and the existence of criminal or administrative sanctions for those that fail to comply with this opinion. From this article, Spanish legislation has branched out to cover all areas related to environmental protection. For example, for environmental liability we have Law 11/2014 and Law 26/2007. While the former seeks to integrate environmental aspects into the drafting, implementation and execution of public and private plans, projects and programs, the latter applies to all types of economic activities and regulates the responsibility of preventing, avoiding and repairing damages from environmental impacts.
If we talk about emissions, we would first consider Law 5/2013 (formerly Law 16/2002) on Integrated Pollution Prevention and Control, which dictates the need to obtain an Integrated Environmental Authorisation to start and carry out any industrial activity. The aim of this law is to regulate any type of emission that adversely affects the quality of the atmosphere, water or land, increase information transparency, and apply the concept of Best Available Techniques (BAT) as a mandatory measure of environmental protection. In addition, all polluting activities that are not subject to this law are covered by Law 34/2007 on air quality and protection of the atmosphere, which aims to achieve optimum levels of air quality. In both cases, the government is responsible for defining and establishing the minimum objectives and requirements of evaluation systems, and serves as a regulatory framework for the preparation of national, regional and local plans.
In the field of energy management, the most significant change in Spanish legislation is Royal Decree 56/2016. Based on the European Directive on Energy Efficiency, it obliges large companies to carry out energy audits every 4 years. Despite these positive developments, these companies are not yet required to take measures derived from audits, which we believe should be the next step. At the same time, we believe that the new law on climate change that will be derived from the Paris Conference will boost the growth of renewable energy development in Spain in order to achieve the goals set by the EU.
European regulation is becoming increasingly restrictive in terms of greenhouse gas emissions. What does Carbon Clear expect for the future? What deserves energy managers’ attention?
CR – Climate change is an unequivocal fact. Although there is still some uncertainty about the magnitude of its impacts, a global average temperature rise of more than 2°C compared to pre-industrial levels can have devastating effects.
The solution entails a rapid transition to a low carbon economy on a global scale. As evidenced by COP 21 and the Paris Agreement, the current political moment reflects the need for carbon management. Reducing dependence on fossil fuels is therefore one of the clearest areas of action if long-term legislative and economic risks are to be mitigated. Renewable energy of certifiable origin is undoubtedly one of the areas with the greatest potential, as well as of course energy efficiency.
The Carbon Management Opportunity
Let’s go back to our Spain – UK comparison. Which Carbon Clear service is the most in-demand in each country?
CR – In Spain, the market is less mature and requires measurement and impact communication services, as well as legislative compliance. Important services to highlight include carbon footprint measurement, a type of report that is growing in Spain in line with the development of sustainability trends in the business world. Measuring a company’s carbon footprint and value chain gives it tangible benefits in terms of energy and economic efficiency. However, the fact that several IBEX35 companies have yet to set emission reduction targets as a result of these calculations reflects an insufficient rate of change and ambition level that Carbon Clear aims to boost.
In the United Kingdom, we generally have a high demand for more strategic services, such as the establishment of action plans against climate change, commitment to the value chain, risk and opportunity analysis, etc.
What is more complicated for Spanish companies, reducing emissions or compensating for them? Why do you bet higher on sustainability planning?
CR – As we saw in our sustainability report for IBEX35 companies, Spanish companies tend to reduce their own emissions, since the impact they have on bottom lines is direct, plus they contribute more energy efficiency and, therefore boost economic savings. Once their emissions are internally optimised, the next step on the roadmap of a growing number of Spanish companies is to influence value chain activities, carried out through the study and subsequent reduction of the carbon footprint of Scope 3.
We can therefore observe how compensation is not yet an all too common practice in the Spanish market, perhaps due to a lack of information. Of course at Carbon Clear we advocate a combination of the two practices for good environmental management.
Cristina Raventós is a senior consultant at Carbon Clear, a leading global organisation offering sustainability solutions for business. Carbon Clear has offices in Spain, United Kingdom, United States and Turkey, where it advises companies on:
- How to reduce environmental impact by reducing emissions
- How to communicate efforts internally and externally, so that the impact of the sustainability plan is reflected in the corporate social responsibility of the company
- How to comply with current legislation: carbon management, GHG inventories, questionnaires, etc.