Greenwashing illustration

Greenwashing Energy

Posted on 23 March 2023

Himaya Sewwandi
Energy Analyst

Comes from a background of Environmental Engineering and specialised in Biohydrogen.

The Advertising Standards Authority of Ireland recently discovered thousands of customers were misled by top ranked renewable energy supplier(s). The 100pc renewable plans from the service providers were revealed to be transmitting electricity generated by fossil fuels. Ireland solar and wind resources are sufficient only to accommodate between 30-40 percent of country’s requirement. Yet the supplier(s) claimed to provide 100 percent renewable energy, orienting the whole advert campaign towards greenwashed energy. Energy greenwashing, a subset of greenwashing, occurs when the energy suppliers claim to utilise 100 percent green energy sources, but they are not.

The demand for green energy increases, and so does the complexity of the energy market structure. Promotional campaigns have kept reinventing more realistic greenwashing strategies such as renewable energy tariffs and trading renewable energy certificates.

Renewable Tariffs and Greenwashing

Renewable tariffs can be claimed either by sourcing direct powers from generators or by accessing the secondary market. The latter option refers to purchasing the Renewable Energy Guarantee of Origin (REGO) offered by Office of Gas and Electricity Markets (Ofgem).

“About 40 energy providers in the UK sell tariffs marked “100% renewable energy”. But some do not directly source any green electricity, a consumer group found.”

Constraining Greenwashed Energy

Is it legal to produce REGO or GO purchased from generators? Yes. Is it legal to use the certificates to mislead the consumers? No. Is there any procedure to avoid creating such loopholes? Yes and No.

  • in 2021, investigations began on how energy retailers market ‘green’ electricity tariffs to consumers
  • a separate call for evidence on third-party intermediaries in the retail energy market also published
  • appointed a Green Technical Advisory Group
  • recently launched Department for Energy Security and Net Zero

The reformation was for a higher transparency to the consumers. The Advisory Group oversees the green taxonomy to be imposed, of which, clamping down the greenwashing is among the priorities.

Despite of all the hurdles imposed by the Government, greenwashed energy has managed to hold its steady grounds. While the consuming patterns are rapidly orienting towards carbon zero products and services, it is important for the businesses to identify whether your energy supplier complies to your contribution to net zero.

Secure Your Businesses A Green Energy Supply

1. Investigating the supplier’s source of energy

However, not all renewable energy sources count as “clean energy”
The consumer needs to be 100% aware of what percentage of the suppliers are clean and what percentage is non-clean.

The UK Government came up with the annual requirement to every licensed energy supplier to produce the Fuel Mix Disclosure (FMD), the mix of fuels they use to generate the electricity they supply. FMD appears to provide details to the consumers whether their electricity suppliers are utilising clean energy sources or not. However, the FMD can often mislead its interpretations.

The breakdown of energy sources in FMD is done into five categories, coal, gas, nuclear, renewable and other. However, biomass, biogas, sewage gas, landfill gas, and biodegradable sources falls into renewables and yet not identified as carbon-neutral.

2. Accessing a certified marketplace

The certification processes like B Corp ensures that all the social and environmental standards are met. Transparency of the supply chain required for the certification assures the energy sources are as clean as the supplier declares it to be.

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We are happy to announce our progressive movements towards B Corp Certification!

3. 100% traceable energy

Ideal condition would be a real time tracking of the business’s energy source. This can be achieved via a marketplace that offers to review the energy generator’s profile for every unit of consumption. The 100% energy traceability can easily eliminate the risk of falling for a greenwashed energy supplier and keep your business clean.

The gravity of the greenwashed energy roots among disobeying the consumer law and questionable business ethics. It deprives the consumers obligation to participate in climate change activities and also put the businesses in the risk of greenwashing.

Remember, it is always better to trace.

A windmill

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