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Provisional UK GHG emissions for 2019: what do they mean and how might they affect company reporting?

By Alison Mungall
2nd April 2020

Last week BEIS published the provisional estimated UK GHG emissions for 2019. They can be found here.  Although these figures are still provisional, they provide some welcome good news. They show significant reductions in UK greenhouse gas (GHG) emissions, particularly from power stations, which reduced their CO2 emissions by 13.2% between 2018 and 2019.

This publication provides the latest estimates of UK GHG emissions. It provides an early indication of emissions in 2019, although they are subject to revision, with the final estimates published in February 2021. Even though the final estimates are published 11 months later, the majority of provisional estimates have shown to be within 2 per cent of the final figures.

Highlights include:

Total UK GHG emissions – In 2019 total UK GHG emissions were provisionally 45.2% lower than in 1990 and 3.6% lower than in 2018.

  • The energy supply sector – this sector experienced the largest reduction in CO2 emissions between 2018 and 2019. CO2 emissions from this sector were estimated to have decreased by 8.4% compared to 2018. This fall was mainly as a result of a 13.2% reduction in CO2 emissions from power stations. In 2019, CO2 emissions from power stations accounted for 16% of all CO2 emissions.  CO2 emissions from power stations were 71.7% lower in 2019 than in 1990. This is despite consumption of electricity being estimated to be around 6% higher in 2019 than in 1990 (although it peaked in 2005 and has decreased since then). The decrease is mainly the result of changes in the fuel mix used for electricity generation, away from coal and towards renewables.
  • Business sector – in 2019, 18% of CO2 emissions were from the business sector. This was similar to 2018. There has been a 42% decrease in business sector emissions since 1990, with the significant drop in 2009 likely to have been driven by economic factors, following the global financial crisis.
  • Transport sector – Transport remains the largest source of carbon dioxide emissions in the UK, accounting for 34% in 2019. CO2 emissions from this sector (excludes international flights but includes domestic flights) were 2.8% lower than in 2018 and 4.6% lower than in 1990. The majority of emissions from transport are from road transport. This is mainly due to the continual growth in vehicle kilometres travelled on roads. Transport carbon dioxide grew to a peak in 2007, 8.5% higher than in 1990. Since then emissions from this sector have fallen back closer to 1990 levels, driven mainly by improvements in new car fuel efficiency, as well as lower traffic growth than in previous years, as a result of a dip following the 2008/2009 recession.
  • Residential sector– This is likely to be a focus of future environmental policy.  In 2019, the residential sector emitted 19% of all CO2 emissions (largely from natural gas for heating and cooking). Between 1990 and 2019, CO2 emissions from the residential sector have fallen by 17% per cent and there was a 1.8% decrease between 2018 and 2019. Reducing emissions from this sector will require a significant shift in the use of natural gas. Consumers are buying new gas boilers at a rate of over 1 million a year. In 2019, a record 1.67 million gas boilers were sold.
  • The influence of temperatures – The 2019 annual average temperature was warmer than the long-term 1981-2010 average by 0.5 degrees Celsius. Carbon dioxide emissions are indirectly influenced by external temperatures. For example, during the winter months, emissions are generally higher than in summer months, due to higher demand for fuel for space heating. Temperature adjusted quarterly emissions estimates remove the effect of external temperatures. Temperature adjustment is determined by the average number of heating degree days in each quarter. This information can be found in Energy Trends. Adjusting emissions for external temperature does not change the long-term trend. While actual emissions are estimated to have fallen by 3.6%, temperature adjusted emissions fell by 3.4% between 2018 and 2019.

It will be interesting to see what the effect of COVID 19 will have on 2020 emissions. There is no doubt that there will be a decrease in the business and transport sectors because of reduced economic activity and travel, similar to the effect seen in 2009. The effect in other sectors is unclear at present.

Many firms report their emissions to mandatory and voluntary reporting frameworks. How will these provisional figures affect reporting?

The answer is that they will not affect the reported figures in the short term. For reporting purposes, companies convert the UK annual energy consumption from their activities into the equivalent carbon emissions, by using government produced conversion factors. The latest published conversion factors are for the 2019 reporting year and were published in early June 2019. The emission factors are based on the UK Greenhouse Gas Inventory (GHGI) from two years before. For example, the 2019 GHG conversion factors are based on the 2017 GHGI, the 2018 conversion factors are based on the 2016 GHGI and so on. Government policy is not to revise previously published factors (unless an update to a previously published factor is considered significant or the cause is an error rather than new data or methodology improvements). The UK GHG emissions for 2019 will be incorporated in the 2019 GHGI, to be used in the 2021 emission factors. Any effect on 2020 emissions from COVID-19 will not feed through to emission factors until 2022.

How will Streamlined Energy and Carbon Reporting (SECR) be affected?

Quoted companies, large unquoted companies and large limited liability partnerships are obliged to comply with the Streamlined Energy and Carbon Reporting (SECR) regulations from April 2019. They will report their UK energy use and associated GHG emissions, with emissions from electricity, gas and transport fuel being reported as a minimum. The 2019 emission factors will be used in 2019 SECR reporting, which is based on the 2017 GHGI.

For SECR reporting, you should use the version of the factors that correlates with the data on which you are reporting (for example, 2019 conversion factors should be used for data from calendar year 2019). If you are reporting on an April to March year, the factors from the calendar year in which the greatest portion of your data falls should be applied. For example, the 2019 factors should be applied to data in reporting year 01/04/19 – 31/03/20. Users that operate a July to June reporting year should apply the newest set of available factors.

If you would like more information or help on SECR reporting please contact Annabell James.