BSI Opens Up Emissions Trading Markets

Press release: 28 March 2003

Emissions trading received a major boost today with the announcement that BSI Management Systems has become the first company accredited to verify all categories of participants in the UK Emissions Trade Scheme (ETS).

BSI can now verify Climate Change Agreement (CCA) participants as trading groups (model 2) in addition to individual facilities (model 1) and Direct Participants. Verification of trading groups potentially opens the ETS up to thousands of smaller businesses for which individual verification may have proved too costly.

The latest accreditation follows an audit by UKAS (UK Accreditation Service) of BSI's work with the British Beer and Pub Association (BBPA). The BBPA is the first UK trade association to be verified as a trading group, with members choosing to meet emissions reduction targets on a group level and the proceeds of trading any over-achievements being shared amongst the group. An independent verification also greatly enhances the level of confidence that can be placed on emissions reduction data.

What is the UK ETS?

The UK ETS was launched in March 2002 to help meet the Government's Kyoto commitment to cut greenhouse gas emissions by 12% by the period 2008-2012 (against 1990 levels). The scheme initially involved 34 major organisations that voluntarily agreed to absolute emissions cuts. These were incentivised by the government to the tune of £215 million, to reduce CO2 emissions in a bid to kick start emissions trading in the UK.

Climate Change Agreements (CCAs) provide a second method of entry to the ETS based on targets for energy use relative to production, agreed between Government and 44 industry sectors. Companies that hit their targets earn an 80% reduction on their Climate Change Levy (CCL) whilst those that over- achieve and have this verified can trade their emissions.

The BBPA' sector target is to achieve a primary specific energy consumption of 56.94 kWh/hectolitre by 2010. This represents an 11.6% reduction from the 1999 performance. When converted into carbon, the sector's CCA will save 16,000 tonnes of carbon in 2010 compared with DEFRA's assessment of 'business as usual'.

In a group verification situation, all data from individual companies is collected and administered by one central body, normally the sector association. BSI's verification is based on a sample set of data and facilities provided by the administrator, which reduces the overall cost for individual companies.

Leading the way in verification services

"Group verification has given all our participants, large and small, the lowest cost route to realising value from over-achievement of their targets and it has also given us, the sector association, extra assurance in the quality of the data we are handling", comments Dr David Long, Director-Brewing of the BBPA.

"The more companies that have access to emissions trading, the stronger the market will become," says Nick Moy, Managing Director BSI Management Systems. "Our aim now is to work with more trade associations across the sectors which have Climate Change Agreements to help their members gain entry to the scheme. Once again we have demonstrated that we are leading the way in verification services and enabling the UK emissions trading market to grow."