What To Know As We Move Towards 2022: Energy Commitments, Improvements, and Government Programs
- Northmore Gordon
- December 8, 2021
- Articles
We are at an exciting turning point as we reimagine how to develop, use, and connect with the energy landscape. With the international community coming together in Glasgow for Cop26 and the establishment of the Science-Based TargetsThe science based targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. SBTi has specific sectoral guidance and is working on a Net-Zero standard. initiative (SBTiScience Based Targets initiative), we are gaining momentum towards reaching a cleaner, more vibrant economy.
Australian industry is making bold commitments of its own to achieve science-based targets that stay in line with keeping global climate change under 1.5 degrees Celsius. This is positive for environmental health, and it also demonstrates savviness as Australia embraces technological advancement and innovation to drive economy into a bright future.
To prepare for the changing nature of business, these are programs, ideas, and initiatives that should be on your radar:
SBTi Launches Net Zero Standard
Developed through a multi-stakeholder process, the SBTi is the first Australian guideline to help companies set science-based emissions reductions targets designed to keep emissions in line with maintaining global temperature rise under 1.5° Celsius.
“The Net-Zero Standard gives companies a clear blueprint on how to bring their net-zero plans in line with the science, which is non-negotiable in this decisive decade for climate action. Because we are running out of time.”
These targets include 1) near-term targets that must be met within 5-10 years of submitting a plan to SBTi and 2) long-term targets that need to be hit by or before 2050.
Under the SBTi, carbon offset programs do not count towards near or long-term targets, placing real emphasis on companies to reduce their Scope 1, 2, & 3 emissions.
Thinking about setting a Net-Zero target? Talk to us about your carbon reduction strategy.
Australian Carbon Credit Unit (ACCU) Price Increase
Increased demand from heavy polluters caused ACCU prices to soar this year. Even with increased supply of ACCUAn ACCU is a unit issued to a person by the Clean Energy Regulator (Regulator) by making an entry for the unit in an account kept by the person in the electronic [Australian National Registry of Emissions Units] registry. Each ACCU issued represents one tonne of carbon dioxide equivalent (tCO2-e) stored or avoided by a project. An ACCU can only be issued to a person if the person has a Registry account. from the Clean Energy RegulatorThe Clean Energy Regulator is the Australia Government body responsible for accelerating carbon abatement for Australia through the administration of the National Greenhouse and Energy Reporting scheme, Renewable Energy Target and the Emissions Reduction Fund. More (CER), there has been unprecedented demand as companies that have surpassed government-set emissions levels scramble to offset their pollution.
The ACCU price surge benefits organisations that are voluntarily generating credits through energy efficiency, biogas generation and fuel-switching.
Carbon credits will continue to have their place and prices will likely continue rising as carbon neutrality maintains popularity. With greater focus on SBTi protocol, it is probable that their prevalence will shift as more companies embrace SBTi methods and prioritize their own emissions reductions over carbon offsets.
If you haven’t factored ACCU pricing into your next project, now is the time to reconsider how the carbon value of your projects can be realised to boost the energy productivity of your business as the world transitions to net-zero.
Shadow Carbon Price
While the concept of a shadow carbon price is not new, it should be given considerable thought if your organisation is not currently factoring the price of carbon into your investment or business operation strategy. With more and more governments announcing net-zero commitments, a cross border adjustment mechanism as proposed by the EU or other form of mandated carbon emissions control mechanism may be right around the corner. Hedging against those changes by incorporating a shadow price for carbon into current financial planning presents a good way to prepare for potential policy change.
Upcoming Government Programs
Program implementation will make considerable funds available for technological implementation and innovation.
- Energy Efficient Communities (EECFounded in 2009, the Energy Efficiency Council (EEC) is a not-for-profit membership association for businesses, universities, governments and NGOs. It focuses on building a market for energy management products and services that delivers: healthy, comfortable buildings; productive, competitive businesses; and an affordable, reliable and sustainable energy system for Australia.) Program – This is an Australian wide program that opens on 12 Jan 2022 at 9am AEDT. This grant provides food & beverage manufacturing businesses (with less than 200 employees) up to $25,000 to improve energy efficiency practices and technologies and better manage energy consumption to reduce their power bills. The program can provide grants towards energy efficiency projects, including:
– installing energy efficient equipment (not including solar PVSolar Photovoltaic)
– installing energy metering & monitoring systems
– energy audits to identify opportunities
– compressed air system audits
– developing an energy management plan
– feasibility assessments of energy projects (not including solar PV)
- Business Decarbonisation Program — The NSW Government is investing $22 million towards helping businesses reduce their carbon emissions. Their plan is to provide strategy, monitoring, technological improvements, and skills training in order to lead businesses forward and build a workforce capable of identifying opportunities and implementing improvements to reach net-zero emissions.
The program will have four areas of focus which will be progressively rolled out over 2021/22:
1. Strategic planning for net zero
2. Metering and monitoring
3. Targeted technical services
4. Industry upskilling
- Victorian Government — Infrastructure Victoria and Department of Environment Land Water Planning will provide final advice on December 31, 2021 on how to best use the gas transmission and distribution networks to stay on track to reach net-zero emission by 2050. Tasmania is engaging in similar discussions related to natural gas infrastructure and is still at the initial phases of discussion and consultation.
- Net Zero Industry & Innovation Program — NSW Government strategy to partner with industry in order to reduce emissions, boost the economy, and spur job growth by investing $750 million. This grant funding is set to encourage innovation in technology and develop pilot programs for innovative methods at implementing low-carbon technology.
The Program has three areas of focus:
1. Clean Technology Innovation ($195 Million) – supporting the development and continued innovation of emerging clean technologies
2. New Low Carbon Industry Foundations ($175 Million) – laying the foundations for low emissions industries by building enabling infrastructure and increasing the capability of our supply chains
3. High Emitting Industries ($380 Million) – deploying low emissions technologies and infrastructure to reduce the emissions associated with existing, high emitting industrial facilities
Talk to us today about any of these upcoming programs or what other energy efficiency support may be suitable for your business now and in 2022.
Energy management may not be your business focus, yet it is becoming more deeply engrained in all business operations as Australia follows through on its commitments to reach net-zero. Staying abreast of these trends, new programs and changes is a powerful way to stay informed, prepared, and in a position to capitalize on the changing energy landscape.
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What is the main topic of Northmore Gordon's article about 2022?
The article discusses programs, ideas, and initiatives Australian businesses should be aware of heading into 2022, including energy commitments, energy efficiency improvements, and government programs, in the context of momentum from Cop26 and the establishment of the Science Based Targets initiative (SBTi).
What is the SBTi Net-Zero Standard mentioned in the article?
The SBTi Net-Zero Standard, developed through a multi-stakeholder process, is described as the first Australian guideline to help companies set science-based emissions reductions targets designed to keep emissions in line with maintaining global temperature rise under 1.5° Celsius. It requires near-term targets to be met within 5-10 years of submitting a plan to SBTi, and long-term targets to be hit by or before 2050. Under the standard, carbon offset programs do not count towards near or long-term targets, placing emphasis on companies reducing their Scope 1, 2, and 3 emissions.
Why did Australian Carbon Credit Unit (ACCU) prices increase in 2021?
According to the article, increased demand from heavy polluters caused ACCU prices to soar in 2021. Even with increased supply of ACCUs from the Clean Energy Regulator (CER), there was unprecedented demand as companies that surpassed government-set emissions levels scrambled to offset their pollution. This price surge benefited organisations voluntarily generating credits through energy efficiency, biogas generation, and fuel-switching.
What is a 'shadow carbon price' and why does the article recommend considering it?
The article states that a shadow carbon price is not a new concept but should be given considerable thought by organisations not currently factoring the price of carbon into their investment or business operation strategy. With more governments announcing net-zero commitments and possible mechanisms like the EU's proposed cross border adjustment mechanism, incorporating a shadow price for carbon into financial planning is presented as a way to hedge against and prepare for potential policy changes.
What is the Energy Efficient Communities (EEC) Program described in the article?
The Energy Efficient Communities (EEC) Program is an Australia-wide program opening on 12 Jan 2022 at 9am AEDT. It provides food and beverage manufacturing businesses with fewer than 200 employees up to $25,000 to improve energy efficiency practices and technologies and better manage energy consumption to reduce power bills. Eligible activities include installing energy efficient equipment (excluding solar PV), installing energy metering and monitoring systems, energy audits, compressed air system audits, developing an energy management plan, and feasibility assessments of energy projects (excluding solar PV).
What is the NSW Business Decarbonisation Program mentioned in the article?
The Business Decarbonisation Program is an initiative in which the NSW Government is investing $22 million to help businesses reduce their carbon emissions. It aims to provide strategy, monitoring, technological improvements, and skills training. The program has four areas of focus to be progressively rolled out over 2021/22: 1) strategic planning for net zero, 2) metering and monitoring, 3) targeted technical services, and 4) industry upskilling.
What is the Net Zero Industry & Innovation Program described in the article?
The Net Zero Industry & Innovation Program is an NSW Government strategy to partner with industry to reduce emissions, boost the economy, and spur job growth by investing $750 million. It has three areas of focus: 1) Clean Technology Innovation ($195 million) to support development and continued innovation of emerging clean technologies; 2) New Low Carbon Industry Foundations ($175 million) to lay foundations for low emissions industries by building enabling infrastructure and increasing supply chain capability; and 3) High Emitting Industries ($380 million) to deploy low emissions technologies and infrastructure to reduce emissions from existing, high emitting industrial facilities.
What is happening with gas infrastructure planning in Victoria and Tasmania according to the article?
The article states that Infrastructure Victoria and the Department of Environment Land Water Planning were set to provide final advice on December 31, 2021 on how to best use gas transmission and distribution networks to stay on track to reach net-zero emissions by 2050. Tasmania is engaging in similar discussions related to natural gas infrastructure but was still at the initial phases of discussion and consultation at the time of the article.
Who is the author associated with this article, and what is their background?
The article is credited to Northmore Gordon, with the author profile describing Craig (Craig Morgan) as a mechanical engineer with 30 years' experience, including more than fifteen years assisting organisations manage energy, greenhouse gas emissions, and the impacts of climate change. This includes seven years focused on energy management and greenhouse gas inventory development and mitigation, and six years on renewable energy generation systems.
When was this article published and how long does it take to read?
The article, titled 'What To Know As We Move Towards 2022: Energy Commitments, Improvements, and Government Programs,' was published on December 8, 2021, by Northmore Gordon, and has an estimated reading time of 5 minutes.
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