Will GHG Protocol changes affect the GO market?

In October, the Greenhouse Gas (GHG) Protocol - the world’s most widely used carbon accounting framework - launched two public consultations, inviting input from professionals across the industry to share their thoughts on proposed changes to the current guidance for scope 2 carbon emissions and market-based accounting.  

But what are the changes? How do they affect big businesses on a global level? Could reformulating the methodology for temporal and locational reporting have far-reaching consequences for the GO market? 

In this episode, Richard sits down with experts in Amsterdam to discuss the proposed updates to the GHG Protocol, and what these changes mean for renewable energy markets and corporate sustainability reporting.

Host: Richard Sverrisson - Editor-in-Chief, Montel News
Contributor: Alina Trabattoni - Italy Reporter, Montel News

Guests: 
Killian Daly - Executive Director, EnergyTag
Carolyn Addy - Head of Commercial, Renewable

Editor: Bled Maliqi
Producer: Sarah Knowles

Transcript

Richard Sverrisson - Editor-in-Chief, Montel News: 0:05

Hello listeners and welcome to Plugged In - The Energy News podcast where we bring the latest news issues and changes happening in the energy sector. In this episode, we're digging into quite a technical topic, but one that could have far reaching consequences for the way companies verify their green credentials. It is the greenhouse gas protocol and potential changes to the accounting standard that most businesses across the world use to report their direct and indirect emissions or how green they really are. On the 20th of October, the Greenhouse Gas Protocol launched two 60 day public consultations, inviting input from professionals across the industry to share their thoughts on proposed changes to the current guidance. So what do businesses across Europe think of the current protocol and what are some of the changes we are likely to see at the end of the consultation? Earlier this week I was at the Resource Conference in Amsterdam, where I sat down with our guests for this episode and our own Italy correspondent, Alina Trabattoni. We talked about how the Greenhouse Gas protocols rules for scope two emissions and market-based accounting rules affect real world deals, and what companies across Europe actually need to help meet their net zero targets. So we're right here in the middle of the bustling Beurs van Berlage, the former stock exchange building here in the heart of Amsterdam, where nearly 1500 industry professionals have congregated to hear about issues affecting corporate renewable energy procurement. But one of the hottest topics at the moment. It's geos, guarantees of origin and the Greenhouse Gas (GHG) Protocol. Alina! Welcome.

Alina Trabattoni - Italy Reporter, Montel News: 1:42

Thank you, Richard. It's great to be here.

Richard Sverrisson - Editor-in-Chief, Montel News: 1:44

Could you just explain to our listeners what the response has been to the proposed changes in the protocol and what are you hearing from your sources close to the matter?

Alina Trabattoni - Italy Reporter, Montel News: 1:54

Do you know what, for sure. There's a lot of debate at the moment, and I think it, what it boils down to is a lot of excitement around the push for globally recognized standards, accounting standards of sorts, something that creates a solid very clear framework for measuring and reporting these emissions. Basically across companies, governments, organizations as well in a very clear, single, clear way. And I think crucially the debate is focused on whether we need more transparent methods or not. And methods that would allow for very easy or at least easier comparison globally as well. And as it always does with climate related issues, the conversation is getting quite heated. People are getting very passionate. On the one side, you have those very much pushing for granular reporting, so very stringent clear, transparent reporting. And that's NGOs, companies regulators, and of course big tech, the Googles of this world. And they very much advocate for it, and they see it as essential for getting to net zero for real decarbonization. And of course, there's also a lot of opposition and that mainly comes from some other industry groups, energy suppliers. Power authorities as well who are basically very concerned. Not so much about the transparency per se, which they back, but about the complexity and the costs that it would all bring on board. Making it also a barrier for the smaller players in the market. And some of them of course, worry that these stricter rules could conversely slow down a market, move towards green complete green transition, net zero decarbonization, and make it more difficult for some firms to operate across these complex systems.

Richard Sverrisson - Editor-in-Chief, Montel News: 3:41

Excellent, Alina, but what does it mean in concrete terms, in terms of the energy transition?

Alina Trabattoni - Italy Reporter, Montel News: 3:45

That's a very good question. From a green energy use and a net zero transition point of view, it would allow for a series of mechanisms and instruments to be embedded into the frameworks. And let's take for example location and time signals. These hourly and location matching, matching reporting methods that would be included into emissions accounting. And this basically means that companies would need to match their renewable energy use to the actual hours of green energy that they use and the actual locations the green energy comes from not just annual totals, which is the case right now. Used to offset credits in some cases even from distant regions which becomes very generic and unclear and. To be honest with you, it is criticized because it allows for a lot of gray areas and in some cases, in some extreme cases, even greenwashing. And the idea is to strip away these vague mismatched green claims and, in a nutshell, incentivize the use of clean energy when and where it's produced.

Richard Sverrisson - Editor-in-Chief, Montel News: 4:51

Fantastic. Alina, thanks very much. Enjoy the rest of the conference. So what do big businesses say about guarantees of origin and the Greenhouse Gas Protocol? I'm pleased to be joined by Carolyn Addy, head of Commercial at Procurement Platform, renewable and Killian Daly, executive director at EnergyTag, a non-profit think tank. A warm welcome to you both.

Killian Daly - Executive Director, EnergyTag: 5:14

Thank you. Thank you very much for having us.

Richard Sverrisson - Editor-in-Chief, Montel News: 5:16

So I think the hot topic, we're here at resource the conference in Amsterdam in this grand old building, the old exchange, they're called the birth. And one of the hot topics at this conference, the resource co compass has been the Greenhouse Gas Protocol and potential changes to it. Maybe if I can start with you, Killian. What is the Greenhouse Gas Protocol and why is it significance?

Killian Daly - Executive Director, EnergyTag: 5:38

Sure. The Greenhouse Gas Protocol is basically the carbon accounting rules used by about 97% of the Fortune 500 companies to report their emissions. So it's the set of rules companies use to calculate how many tons of CO2 do I have. And so the hot topic of, I suppose today and this conference is the Scope two electricity emissions accounting and proposed changes that are coming for that standard. By way of background, so I used to buy power for a French company called Air Laed. Got a wholesale power procurement at very large scale. And I then also used to do the carbon accounting using the Greenhouse Gas Protocol. So I've worked with it practically also in the past and definitely saw, some areas of improvement potentially. And now I'm working, my day job largely is working on trying to improve the standard as a member of the technical working group that's updating with the Greenhouse Gas Protocol.

Richard Sverrisson - Editor-in-Chief, Montel News: 6:27

Excellent. Could you explain to those listeners? Yeah. Kilian, who, may not be aware what Scope one and Scope two is, what the difference there is?

Killian Daly - Executive Director, EnergyTag: 6:33

Yeah. So basically like scope one I don't wanna like bore people to death now with carbon accounting, but basically Scope one is the emissions you have directly from burning stuff in a factory. So you're burning gas to make heat, or you're burning coal to make electricity. That's your scope One, it's on your operational sites. Scope two is really the emissions that are you know output by someone else to supply you electricity.

Richard Sverrisson - Editor-in-Chief, Montel News: 6:57

Okay. Yeah. Yeah. So that's why here amongst the renewables conference, I think that's why it's so and so important. Carolyn. So who does it affect them? Who does the greenhouse protocol affect? It's not just the fortune, 500 or 100 companies is it, is, it's in the market more generally than that.

Carolyn Addy - Head of Commercial, Renewable: 7:11

Yeah, it's the accounting standard for carbon accounting. So most companies who are doing any kind of carbon accounting will be using the GHGP.

Richard Sverrisson - Editor-in-Chief, Montel News: 7:18

Okay. Excellent. And what, why are these so important, these accountant status?

Carolyn Addy - Head of Commercial, Renewable: 7:24

I suppose what you need is you need a common baseline for companies to be measuring their carbon emissions so that we can accurately track where we are now, progress, et cetera. I think if you don't have a common baseline, it calls into question the accuracy of performance measures, target setting, et cetera.

Richard Sverrisson - Editor-in-Chief, Montel News: 7:43

And these, this is global rather than just European, right?

Carolyn Addy - Head of Commercial, Renewable: 7:46

Yes, exactly.

Richard Sverrisson - Editor-in-Chief, Montel News: 7:47

And, but it's voluntary. It's not mandatory. These are not obligations put on the companies.

Carolyn Addy - Head of Commercial, Renewable: 7:52

No. So it's a it's a choice of accounting standard that can be used, but they also underpin SBCI, RE100. CVP. So most of those kind of target setting frameworks will use the GHGP rules to underpin them.

Richard Sverrisson - Editor-in-Chief, Montel News: 8:07

Okay. Absolutely. I think that's important as well. And even though we're maybe in a bit of a backlash against some kind of sustainability criteria, are you seeing that Killian at the moment?

Killian Daly - Executive Director, EnergyTag: 8:15

It depends where you're like, obviously, so we have teams in the US as well, and obviously there's a very open backlash there. Not everywhere, right? The US is a big place and some states are actually doubling down. I was in China last week. There's definitely not a backlash against clean energy there. They're running in the opposite direction to the us so I think we need to. Also think about other parts of the world. In Europe I don't think maybe there's a, a backlash to sustainability or a little bit to green energy. But I think in Europe, ultimately we don't have a choice, right? Like we actually have to go and decarbonize for energy security reasons, for competitiveness reasons. So I think there's other pillars in Europe, because we don't have cheap gas, that means that we need to go down this path. You mentioned sustainability standards, so like the EU does have corporate sustainability reporting directive. That is being trimmed down, but it will still apply to large companies. And the greenhouse gas protocol is one of the methodologies that's mentioned in that standard. So there are regulations that are also requiring companies to report and GHGP is the main way that is used by most companies to do that. So there are examples of regulations as well that are requiring this reporting. Simply put, like why do accounting standards matter? What? Imagine we had no common standards for financial accounting and everyone could just make up. Essentially what profit they had this year according to what best suited them. There'd be no comparability, we wouldn't be able to track what businesses are performing well and what are not performing so well. And I think that's one of the, today's Scope two standard was, first defined like over 10 years ago. It was designed for a time with very little renewables on the grid to get like maybe a market started. There's something like pretty glaring concerns or inaccuracies in today's standard that mean that there's a number of very large companies that already report no emissions, and that's not really reflective of what we actually need to do, to have no emissions as a society or as a kind of, even a power grid,

Richard Sverrisson - Editor-in-Chief, Montel News: 10:04

But are any companies there's a big commitment to the protocol, right? As far as I can see it, and so I think company, people are saying, no, we don't need to go ahead with this or we need to, we are going to, we are gonna do our accounting in a different way. There's, there is commitment from the big tech, from smaller companies to be part of this or to set these guidelines.

Carolyn Addy - Head of Commercial, Renewable: 10:23

Yeah. I don't think there's so much a pushback against it. I think it's more about what the changes should look like. There's quite a lot of discussion going on around that. So the updates are under public consultation now and, there's, everyone should be taking the opportunity to have their opinions heard. So there's maybe some discussions about how it should evolve. But whether it should evolve, I don't think is under, under, under dispute

Richard Sverrisson - Editor-in-Chief, Montel News: 10:45

because what we are talking about in particular now, I think we'll take a discussion into what the impact the consequences are for the guarantees of origin markets. So the way that you verify the power that you produce is green. So what are the changes on the table then? Carolyn, you mentioned the change. I think there's a nice region to what we're gonna discuss now.

Carolyn Addy - Head of Commercial, Renewable: 11:02

Yeah, sure. I will jump in by Killian is much more much more well versed in it, but fundamentally it's about increasing the traceability and credibility of reporting. Currently a lot of corporates will be reporting on an annual basis. And we're essentially moving to more spatial so locational matching and more temporal matching so that you can actually say that every hour of consumption or what you are reporting is clean energy is actually matched by production.

Richard Sverrisson - Editor-in-Chief, Montel News: 11:31

So that's one area. The other, is there more discussions around de deliverability? Yeah, that's a bit of a mouthful, but, or basically how you deliver that.

Killian Daly - Executive Director, EnergyTag: 11:38

I think, yeah, like a good model for what's being proposed is essentially how the power market works. So today the power market works on a 15 minute matching basis. That's how power is settled. And in, in regions where power is deliverable or where you have a single price of power. And so the basic idea is that the proposal on the table. Is that, let's say after 2030, so after a phase in period, just large companies, so a subset of companies will have to do hourly reporting of where their energy is coming from. So it doesn't mean they have to match every single hour to be a hundred percent clean every hour, but it does mean that they can, for example, claim to use solar power in the middle of the night like they can today. And it will also mean there more market boundaries that are better representing reality. So yeah, if you're in Portugal. You probably won't be able to say that I'm a hundred percent Norwegian hydropower because that isn't physically real. You can't actually do that. You can't ring a power supplier in Norway and get your power delivered to Portugal, right? So it'll tighten up a little bit. The types of claims that are being made today that have too light a link to the reality of how the power grid and the power markets work. Of course there, I mentioned there'll be flexibilities to this. SMEs will not have to do the hourly accounting. You can use things like load profiles if you don't have hourly data for all your sites. It's something that's, I think, gonna be measured and phased in appropriately, but making some pretty fundamental changes to the accuracy of the accounting.

Richard Sverrisson - Editor-in-Chief, Montel News: 13:05

But yeah. Does that mean that the market needs to change? That the, there's something in terms of the framework or the architecture or the regulation that is lacking, that enables, that needs to be tighten up. Carolyn, what's your view?

Carolyn Addy - Head of Commercial, Renewable: 13:18

It's, it is the visibility. So it's being, it's having the tools. To see where, so from a corporate's point of view, where their consumption is being matched by the solutions that they're procuring, so be they unbundle the acs, some kind of green tariff, A PPA, getting the data available. To match consumption and production. The data is there, it's about getting hold of it and having a system in which you can use to essentially report that and then act on it. So first stage of, for most clients will be, most companies will be visibility and then they can work out, right? What can we achieve? What ambition should we now set around this hourly piece? And then how are we gonna achieve that? But they're they need the foundational understanding of what it looks like now

Richard Sverrisson - Editor-in-Chief, Montel News: 14:04

in terms of the hourly match. I think that's quite interesting. Yeah. You said that 'cause so companies match the hourly profit doesn't mean they have to be a hundred percent green. Should they be striving to be a hundred percent green?

Killian Daly - Executive Director, EnergyTag: 14:13

Ultimately, yes, but being really a hundred percent green is hard. Unless you're in Norway or Iceland, then it's a different story. But if you're in Germany, being 100% renewable for the German system is very hard and we should strive towards that. But we. We have a problem, I think if, companies are a hundred percent renewable but the grid is 50. Like what exactly is going on there? So I think the end goal, of course, should be a hundred percent real, clean, powered but that might mean different things in different places. The Greenhouse Gas Protocol, again, it's just an accounting methodology, so it'll just be like, what are my emissions? Not that I must have zero emissions by Year X. That's very important. The second thing is that obviously we've, we have a lot of companies who are a hundred percent renewable already. So all the big tech companies are already dumb. Like they, according to today's rules, and again, that's good. And it's fantastic that they're in these markets buying renewable energy, but it's not really accurate to say that they are a hundred percent green because they're obviously still not green at nighttime when there's no wind or sun, but they're using credits from the daytime, I think it's like maybe a bit of a reset about some of these targets, some of the being a hundred percent renewable right away. Next year is the only acceptable thing. And realizing that decarbonization is hard and in some grids it's extremely hard. And so we need to maybe 80% green is already a great thing in Germany, right? Yeah. But really not based on a kind of a fudged accounting.

Carolyn Addy - Head of Commercial, Renewable: 15:40

I also think it's a really important point that I, I think we, when we talk about this change, I think we often focus on potential challenges and how difficult it might be for companies to move towards it. And I think sometimes that's overblown. I also don't think that because something's difficult, we shouldn't do it. I also think there's a strong opportunity for particularly kind of climate leaders, the front runners that, as Killian said, they've probably already been a hundred percent renewable for a number of years. What is their next step? Where can they put some R&D and some resources into something that shows more credible impact and they get then get the benefit from?

Killian Daly - Executive Director, EnergyTag: 16:14

Otherwise you should just be able to sit back and say, oh, we've done our bits. No, it's up to the rest of the

Carolyn Addy - Head of Commercial, Renewable: 16:18

Exactly. But a lot of them don't want to, but in order to get the resources to, to plow into the work that's required, they need to be able to show some benefit. And, a lot of them are, they're answering to investors and various stakeholders, so they want to be able to say, okay, we are going further. We're, we are pushing the envelope in. And so I think, often, as is often the case, there's an opportunity as well as a challenge.

Killian Daly - Executive Director, EnergyTag: 16:38

And just maybe to give an example, so I think, to get to zero. I think as a company or as a society, right? Like we need to build loads more renewables. We also need a lot more batteries. We need a lot more demand flexibility. We probably need like clean firm solutions in some countries, right? So there's a lot of boxes that need to be ticked. Today in the PPA market, about 1% of PPAs have storage in them. I think hardly any European countries are issuing guarantees of origin for storage. So we have a long way to go yet, right? Like we have, if we're not like thinking about demand response, storage, other solutions that firm up renewables, that's only half the job done. And so if we have an accounting system that basically says you are done just from buying wind and solar and maybe a bit of hydro, it's not capturing the full picture.

Richard Sverrisson - Editor-in-Chief, Montel News: 17:27

Yeah, no, and I think that's I think this is quite crucial as well, isn't it? I think in the terms of, matching. There's a discussion around whether you buy these guarantees of origin. Yeah. Or whether you say either the grid is a hundred percent or whatever, renewable, therefore I'm a hundred percent renewable. So this location versus market based. Does this put a, that end to that kind of discussion or debate, or will it

Carolyn Addy - Head of Commercial, Renewable: 17:48

No, so the, with the update both location and market based will be, will continue. They will just have slightly different kind of criteria.

Killian Daly - Executive Director, EnergyTag: 17:55

I think. So of course both will continue in the reporting, but I think sometimes, because of the way the market based rules work today they're why they're not really, take Norway, right? So Norway exports about 20 terawatt hours of electricity in a year, and about 120 terawatt hours of green power bring certificates. So six times more than it actually ever could in power. And so you end up with these situations in the accounting where like a company who doesn't buy any GOs in Norway and market-based accounting is fully powered by fossil fuels. Yeah. Even though, no. And then people are like hang on. What's going on? Like everywhere there's hydro all around me. And I think that some of the disconnects between the location and marketplace method I think will be somewhat resolved with these changes.'cause it draws the marketplace method back more to reality, but crucial. Still enables people to go out into the market and buy green energy and make a change. Something that you cannot do in the location based method.

Richard Sverrisson - Editor-in-Chief, Montel News: 18:47

Because at the moment, it does lay people open to criticism about greenwashing. Sure. And then come, aluminum producer in Iceland or Norway in a hundred percent renewable system. We'll look at their, their power bill and say, okay, it's fossil, mainly fossil fuels, which is people will question that and. And I think yeah. So course quite widely. So but it will go, the greenhouse, the changes to the greenhouse gas protocol will go some way to reduce those kind of accusation potential accusations.

Killian Daly - Executive Director, EnergyTag: 19:15

I think so, yes. You like I have talked to the aluminum smelters in Norway, in Iceland, who have pretty significant concerns with the current methodology for how this accounting works. That, they're being powered by fossil fuels in Iceland, even though there are none because their certificates are going to Europe and Iceland has no interconnection to Europe. So some of this stuff will that will be fixed in this new approach. And I think another thing, it'll really put a more of a value on like truly green production, right? So like these guys in Iceland, they're competing with basically aluminium smelters in the Middle East who are powered by a hundred percent by gas. But then buy wrecks from some nearby nation, bring them in, and then green up their aluminum production in a way that is not at all physically linked to their, to the real world, like the real electricity supplying them. And these things are not, they're just not a good incentive structure for, to be serious about decarbonizing, like heavy industries like aluminium.

Richard Sverrisson - Editor-in-Chief, Montel News: 20:10

But could it be also be the case that you'll put foot a stop to, for example, green produced in Norway, Iceland, for example, Sweden. Selling certificates to Portugal as you mentioned earlier, or to the Dutch railway company and so that they can then claim that they're green.

Carolyn Addy - Head of Commercial, Renewable: 20:25

I think you start putting a value on EACs created at different times, and as soon as you do that, you start creating a market for it. And EACs that are generated in times of low supply, have higher value and whoever is demanding them will pay for them. So it is also, so while it's an accounting standard it's also helping derive some market signals to move towards a fully diversified energy system within country, which is what we all need and which, we're talking about a lot of this kind of redistribution across markets is because you don't have the correct market signal. So it's, that's the kind of, that's the end goal.

Richard Sverrisson - Editor-in-Chief, Montel News: 21:01

EACs, could you just explain that to the listeners?

Carolyn Addy - Head of Commercial, Renewable: 21:03

Energy Attribute Certificates

Killian Daly - Executive Director, EnergyTag: 21:04

So maybe just on that, there's a very important point because, so in the rules that are being proposed essentially yes. In Europe, it's like in country, except if you can actually prove that there's interconnection and so Norway can and will still be able to export guarantees of origin to serve corporate customers in other parts of Europe. But only in a way that actually respects the actual electricity flows out of Norway. Sure they can maybe export 20 or 25 terawatt hours if they build more interconnection. Maybe they can do 50, if that's how much interconnection there is in the future. But it's, again, it's gonna be tied to this reality in a way that, respect some basic limits. Where today, there, there is no limit. Like you could, and I think almost the entire Norwegian hydro fleet is exporting its certificates across Europe in a way that. Ultimately dampens the signal to build more renewables in, in the Netherlands for example, because they're just taking the Norwegian hydro and using it there, even though it's not really supplying them.

Richard Sverrisson - Editor-in-Chief, Montel News: 22:01

That's very interesting. So that could, may be reduced some of the supply coming from Norway. Certainly from Iceland

Killian Daly - Executive Director, EnergyTag: 22:07

I don't know if that's a bad thing the market is oversupplied and has been for years, like the price, I think when two weeks ago I looked at the future prices of guarantees of origin, it's about 40 cent a megawatt hour, right? So that's not material enough to really drive, additional investments in renewable energy.

Richard Sverrisson - Editor-in-Chief, Montel News: 22:22

But imagine maybe the big Norwegian and Icelandic utilities may not be so happy. Everything their mark is there. Does it mean you have to match each megawatt across, across the cables and then enter from production to consumption?

Killian Daly - Executive Director, EnergyTag: 22:34

If you're doing a cross border?

Richard Sverrisson - Editor-in-Chief, Montel News: 22:36

Yeah.

Killian Daly - Executive Director, EnergyTag: 22:36

It will mean that, there will be like a mechanism similar to how you physically transfer electricity and do contracts across border to make sure that Yeah, like that the number of certificates going across the border, let's say 20 units of electricity is going across that only 20 units of certificates are not under.

Richard Sverrisson - Editor-in-Chief, Montel News: 22:54

These could have significant changes in the way that the market is operating. And the guarantees of origin. So Carolyn what has been the what has been the the response from the market so far to these changes or the proposed changes,

Carolyn Addy - Head of Commercial, Renewable: 23:05

Super interesting. So I would say you've got certain sectors that are ahead on this. I would say the tech sector has been leading on this for a number of years. Also, we see a lot of interest from F-M-C-G, so a lot of consumer driven businesses. I would say it's a lot of the front runners. So RE 100 members, RE 100 member types, want to be sustaina sustainability leaders. We see a lot of interest from there. A lot of them are. I would say currently readying are trying to get visibility. So not so many are jumping in and setting any hourly matching targets at the moment, but they see the changes coming. They want to get ahead of it, so they're going, I need visibility now of what this looks like, what I might be able to aim for, and what there may be some cost implications.

Killian Daly - Executive Director, EnergyTag: 23:50

Then so if you take Engie for example, which I think is the biggest, one of the biggest PPA suppliers, in the world. So they have a stretch goal like for I think 20 or 25% of all of their PPAs to be 24 7 PPAs by 2030. So like they're really thinking about how do we move towards more hourly matched PPAs? How do we move towards products that are really matching the actual demand of consumers, right? Because ultimately, I think something that we maybe forget sometimes, unfortunately because of these rules is that. Something like a PPA ultimately it needs to match as much as possible the demand of the consumer to, to hedge their electricity supply. And the PPA market obviously has been in decline. It's in severe decline in certain markets because of a lack of thinking and focus on, adding in batteries alongside solar. Because today's market, at least the guaranteed origin market, just doesn't incentivize us to work on that problem. Which we have to ultimately for a healthy PPA market in the future, of course some people are going to make monies in different ways. I would say and some people who make money today from selling large amounts of guarantees of origin to countries where that's not deliverable. These rules are obviously gonna be more challenging, but then people developing renewables and batteries in those countries where the 40 cent certificate is no longer available are obviously gonna. Get more revenue.

Richard Sverrisson - Editor-in-Chief, Montel News: 25:10

Yeah.

Killian Daly - Executive Director, EnergyTag: 25:10

So there's like any change, there's gonna be people who are more or less disa sorry, advantaged

Richard Sverrisson - Editor-in-Chief, Montel News: 25:14

But is there, there's a simple solution to that. Isn't that grant guarantees of origin to batteries if they're being fed from solar or wind grant them the guarantees of origin, which not happening many markets, is it?

Killian Daly - Executive Director, EnergyTag: 25:24

Yes. I completely agree and I think that needs to happen very quickly.

Richard Sverrisson - Editor-in-Chief, Montel News: 25:28

I'm glad we agree there. So Carolyn, what. Are there some concerns around the changes as well? Obviously there's a lot of positivity around, you mentioned the RE 100 companies and the big people who want to be certified as as green. But what, are there any concerns? We mentioned maybe some of the utilities maybe a little bit worried.

Carolyn Addy - Head of Commercial, Renewable: 25:46

So I tend to work mostly with the corporates who are gonna have to abide by the changing rules. So I definitely, it's around complexity and additional resources required and how, what, what costs will be needed to cover what it will mean for their sustainability target. So there, is there, when I say positivity I would say it's they, that those companies see the changes coming and they wanna get ready. I think there's a, what that will look like. There is caution, some of them just to see the opportunities, those kinds of companies. But it's complexity, it's resources required. Do they have to change internal systems? They, platforms, large companies that are, have a certain kind of EMS system that they're gonna have to input, new, a new management system. So there's concerns around that cost

Richard Sverrisson - Editor-in-Chief, Montel News: 26:28

as well. Yeah,

Carolyn Addy - Head of Commercial, Renewable: 26:29

exactly.

Richard Sverrisson - Editor-in-Chief, Montel News: 26:30

Yeah. If I can round off Killian say what are the next step? What happens next in the process? Carolyn mentioned the consultation process. And so when does that close? So how long do you think we, what happens after that?

Killian Daly - Executive Director, EnergyTag: 26:39

I think, and one of them just maybe on the, also on the concerns part I think sometimes, there's not, everyone fully understands what is even being composed right now. So there's still a lot of people who are like, reading this thing, trying to understand what's going on. Like I had a conversation yesterday with a large utility who were confused and thought that this would mean that. Their customers would have to be 24 7 matched by 2035 or something, which is not at all what it says, so I think, a lot of the questions are literally just trying to understand exactly what the proposal is and then, seeing where the opportunities are in that. In terms of the process. Two weeks ago the Greenhouse Gas Protocol launched a public common period. Open for 60 days. So right now, just go on to greenhouse gas protocol scope two. Google that and you'll see the public comment. It's open until December 19th. And so everyone is encouraged to respond to, to that we are obviously at EnergyTag, for example, putting together like a guidebook. We're gonna launch that later on today or tomorrow to help people understand and demystify, because it's quite a, it's quite a complicated topic and there's a lot in the comment documents. But ultimately it's really important that people make their voices heard and so that we can be sure that whatever emerges at the end of this at the end of this update is both has high integrity and is also workable.

Richard Sverrisson - Editor-in-Chief, Montel News: 27:56

Absolutely. So I think we'll be when would the responses be published and maybe their final conclusions.

Killian Daly - Executive Director, EnergyTag: 28:01

Yeah. The public comment is gonna be closed December 19, the first Q1 next year we're gonna be crunching through all of that in the technical working group. Potentially there'll be another public comment next year. It's it's not certain. And then the final publication of this is for 2027, alongside three other standards in the Greenhouse gas protocol. So on scope one, on scope three and yeah, on some other, so stuff as well.

Richard Sverrisson - Editor-in-Chief, Montel News: 28:24

Hopefully it's not, 2027 is not that far away, Carolyn. So I think you, so those companies are already starting to, you said. Starting to look at the changes that they may have to make.

Carolyn Addy - Head of Commercial, Renewable: 28:33

Yeah. So we still I, so we still talk to companies and say, oh, it's actually quite a long way down the line. We're not gonna look at it yet. And I would say, particularly for very large companies who have a wide turning circle, you're gonna start like changing your systems internally, changing governance around this. We think you should be starting already to start looking at it, talking to, internal risk and regulatory teams, et cetera. So getting your ducks in order, getting visibility, and that's also where you probably got the opportunity to get ahead of this market. There's also some. Like current procurement decisions that if you look at it through an hourly lens, you get ahead in terms of getting better hourly coverage now. Yeah. When the changes come in, those kind of contracts will be in higher demand. So there's also a kind of an ROI for looking at this earlier as well.

Killian Daly - Executive Director, EnergyTag: 29:17

And I think maybe just one thing on that I know that a lot of companies are already, looking at what's their hourly score like, and I was talking actually yesterday to very large supermarket chain in Belgium, they have 900 sites around the country. And they actually were like, you know what? Like initially when we heard about this, we were like, whoa, this sounds a bit complicated and scary. And then they realized we actually have all of this data anyway because we need to check our bills and stuff. And that's how power is built. And so a small team of them just like. Went and looked at their contracts on supply side and looked at their demand and calculated their hourly score in, in house. So I think once you get started on it, it's not as, as daunting a task as it's first seems.

Richard Sverrisson - Editor-in-Chief, Montel News: 29:55

Not that scary.

Killian Daly - Executive Director, EnergyTag: 29:55

It makes people, it's not that scary. Exactly. It's not that scary. But, eventually once you put your mind to it it's also very far from being the hardest task that we're doing today.

Carolyn Addy - Head of Commercial, Renewable: 30:03

There are also some very good platforms out there that you can use. I would say something that also we would really encourage. And particularly all corporates, if they have any questions about it, we and other people who are involved in this are really happy to answer the question because the more kind of stakeholder engagement in the public consultation, the better for everyone.

Richard Sverrisson - Editor-in-Chief, Montel News: 30:21

Yeah. Brilliant. I thank you Killian and Carolyn so much for clarifying and maybe demystifying some of this which seems very daunting and scary. Yeah, thank you very much being guests on the pod.

Carolyn Addy - Head of Commercial, Renewable: 30:29

Thank you so much.

Killian Daly - Executive Director, EnergyTag: 30:30

Thank you. Bye. Bye.

Richard Sverrisson - Editor-in-Chief, Montel News: 30:32

It is been an excellent and insightful discussion. I hope you agree, listeners, and thank you for tuning in to this episode. Our podcast episodes are released every Friday. For the latest news from Montel, please visit montelnews.com and you can follow us on LinkedIn, Bluesky, and other social media channels. See you next time.