A little while back I wrote a blog (
you can read it here) on a fairly large deal in which Marks and Spencer had bought some certificates which supposedly had some sort of associated carbon saving and that it was using these as part of its plan A strategy for sustainability. I explained in my blog that these certificates actually have no carbon value, that if they one day do, this will represent a double subsidy and that M and S should think more considerably about where it spends its money as in the case of the certificates they have bought, they might as well have burnt the money.
In the meantime, the other green gas certification scheme (run by the REA) (that’s right, there are two schemes – and less that 10 biomethane projects currently) got back to me with a thoughtful and considered piece (
it’s here). While I still disagreed with some aspects particularly around double counting, it was good to speak to them on this issue. I have heard nothing from the other scheme or from M and S.
Before I go on I want to make three points:
1. I am very supportive of growing the use of sustainable biomethane and I have been and continue to be very heavily involved with the policy and regulation around biomethane. I know this area like the back of my hand. My objective is to ensure that the incentive regime for biomethane is enduring, sustainable and fair.
2. I’m a big fan Marks and Spencer, I think it’s a great supermarket and I spent a lot of money in there at the weekend, on clothes and presents and I hope they want to ensure that their money is spent in the best way possible. Their Plan A initiative is something to be proud of and I commend them for leading the supermarkets on this.
However, on Friday, M and S released
this blog which is fully copied below. Their position on green gas certificates has clearly not changed and in fact I find the text quite concerning. It seems as though M and S want to go hell for leather as they say:
‘our commitment to ensuring 50% of the energy used in M&S buildings comes from certified green biomethane sources by 2020’
Please M and S, don’t commit or do this. I promise you your money would be better spent elsewhere, by doing something which will actually reduce emissions. You buying certificates represents a net cost to M and S and your customers. You are not delivering any additionality (in terms of biomethane) but are just providing more income to biomethane producer who is already subsidised by the Government to build biomethane plant. The detail on these points is provided in
my earlier blog.
The M and S blog also says:
‘This legal framework is likely to become industry standard and will provide M&S with a competitive advantage in accelerating a route to market for biomethane developers.’
I have never heard anyone say this will become industry standard and this simply sounds like PR for the scheme to me, what the biomethane industry needs for the foreseeable future is the continued support from the RHI.
There has been talk of DEFRA considering biomethane credits/certificates as something which can be used under carbon reporting however this has not been confirmed and clearly shouldn’t be as the carbon savings have been paid for the UK tax payer (through RHI) and the associated reductions should be reflected in the overall UK gas grid carbon intensity within the Defra emissions calculator.
I also do not see how M and S has any sort of competitive advantage. Because this is a net cost, surely that is a competitive disadvatage.
Finally, this is not providing a route to market. It is just increasing the amount of money going to developers for doing nothing. The RHI is what provides the incentive to join the market and saying anything else is wrong.
So my final plea. Look at the numbers and the current rules before investing any more in this. As we have learnt from the world of carbon offsetting and emissions trading schemes before, investing in actual things and infrastructure rather than hocus pocus accounting schemes is the only guaranteed way to reduce actual emissions.
Biomethane gas, break crops, anaerobic digestion are all the elements that are helping to transform how we deliver clean energy. We spend a lot of time at M&S optimising our existing green initiatives, yet there are still those innovations that change the way we, and the wider industry, approach energy procurement.
M&S recently became the first retailer in the UK to source biomethane gas to heat its stores, as well as the first FTSE 100 buyer of the Biomethane Certification Scheme. The move into green gas is the next big step in our bold Plan A energy commitments.
We already source our electricity in the UK & the Republic of Ireland from renewable sources, a quarter of which are small-scale. Our entry into the green biomethane gas market represents the next chapter towards fulfilling our commitment to ensuring 50% of the energy used in M&S buildings comes from certified green biomethane sources by 2020. The scale of the prize is significant.
The biomethane gas will be produced at an anaerobic digestion plant near Doncaster, using break crops (non-commercial crops used for soil regeneration) from carefully chosen farms across Yorkshire and the North East that fit with M&S’ sustainability criteria. The gas is then pumped into the national grid and M&S benefits from the carbon reduction.
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The deal is for 36GWh of biomethane certificates, the equivalent amount of energy to heat 15 M&S Simply Food stores all year round, and will reduce M&S’ carbon footprint by over 6,400 tonnes annually.
So what makes biomethane so special? In principle, the benefits are simple: when it comes to the natural gas grid, biomethane production is the only truly green option. It can be produced in the UK, presenting no need for the purchase of overseas carbon-offset certificates. It is both green and homegrown.
Despite the technology behind the production of biomethane, this is a story about making markets. For the first time, break crops are being given a route to market that didn’t previously exist, creating significant revenue for farmers and the agriculture industry.
With this level of commitment, innovation risks need to be managed, which we are doing through two key cornerstones: collaboration and accreditation.
Any new market development or strategic initiative is usually only as good as the parties and people involved. M&S has invested in green energy sourcing expertise since 2006 which has helped to pioneer development on renewables and recognised that the next big thing was the greening of the gas grid. Having engaged with experts in the field, a number of game-changing deals have been agreed with supplier partners to make the deal a reality.
Ensuring we had a fully auditable certification scheme in place, for reporting purposes, was the other must have, de-risk factor. Traceability is essential. The independent Biomethane Certification Scheme (BMCS), run by Green Gas Trading, was set up to provide both a credible process for certifying biomethane and a trading platform for certificates.
The certificates represent the green, or ‘bio’, element of the biomethane produced at the plant, rather than the physical commodity gas itself. The certificates can be traded separately and allow M&S to demonstrate that they have decarbonised their existing gas supply, without affecting any existing contractual arrangements in place across UK stores.
This legal framework is likely to become industry standard and will provide M&S with a competitive advantage in accelerating a route to market for biomethane developers.
As firsts go, breaking the tape on biomethane really marks the start, not the finish.
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