A company’s emissions from transportation have a massive impact on energy & climate targets. Transport represents almost a quarter of Europe's greenhouse gas emissions and is the main cause of air pollution in cities. Further, the transport sector has not seen the same gradual decline in emissions as other sectors: once again, the latest European Environment Agency (EEA) report on progress towards Europe’s climate and energy targets reveals the increase of transport emissions in almost all EU member states.
Consequently, the Commission's low-emission mobility strategy, adopted in July 2016, considers transport emissions as part of climate-related legislation. For example, the UK’s Energy Savings Opportunity Scheme (ESOS) and the new Streamlined Energy and Carbon Reporting (SECR)schemes include transportation in their requirements. As we have discussed in the first blog of our SECR series, SECR increases the number of obligated companies in the UK to around 11,900. Many of these newly obligated businesses will be measuring their transport emissions for the first time through SECR.
So how can UK-based organizations prepare?
Official SECR Reporting requirements on transport for unquoted large companies or LLPs
The SECR report must include the annual quantity of energy consumed from activities for which the company is responsible, including the consumption of fuel for the purposes of transport. In the case that a company uses electric vehicles for transport, electricity used for this purpose must also be reported. Companies only need to report on energy consumption from transport where the organization is supplied with the fuel for business purposes, not where a transportation service includes an indirect payment for the fuel consumption (e.g. taxi ride). Therefore, only transport where the organization is responsible for purchasing the fuel is required.
Energy consumed for the purposes of transport is defined as: energy used by a road going vehicle, a vessel, an aircraft or a train during any journey which a) starts, b) ends, or c) both starts and ends within the United Kingdom. The following activities should be considered when accounting for transport fuels:
- Fuel used in company cars on business use
- Fuel used in fleet vehicles which you operate on business use
- Fuel used in personal/hire cars on business use (including fuel for which the organization reimburses its employees following claims for business mileage)
- Fuel used in private jets, fleet aircraft, trains, ships, or drilling platforms which you operate
- Onsite transport such as fork-lift trucks
Going beyond official requirements towards Scope 3
SECR set a minimum requirement within scope 3 to report on business travel in rental cars or employee-owned vehicles where they are responsible for purchasing the fuel. However, they encourage organizations to go further – by voluntarily reporting on their entire scope 3 emissions category as well. Companies that are well established in transport reporting may consider going this extra step to demonstrate transparency and their commitment to emissions reduction. A full Scope 3 assessment would include fuels from vehicles that are not operated by the company – including train, air and taxi journeys. Gathering the data for this exercise will be more challenging, but SECR is likely not be the sole use of this data. Public disclosure systems, such as CDP, ask for comprehensive emissions data from supply chains and Scope 3 emissions, and will reward the extra efforts with a positive score.
The following activities are not required to be included in your calculation of your total energy consumption but may be reported separately as part of Scope 3 emissions:
- Fuel associated with train travel of your employees where you do not operate the train
- Fuel associated with flights your employees take where you do not operate the aircraft
- Fuel associated with taxi journeys your employees take where you do not operate the taxi firm
- Fuel associated with transportation of goods where you subcontract a firm or self-employed individual to undertake this work for you
How to get started
Data gathering is a challenge that applies to all SECR required figures and information. However, transport data comes with the unique problem that central inventories or software-based data pools rarely exist or are designed for other purposes, spread across the company and owned by different user groups. Consequently, many organizations struggle to fulfill the transport-related reporting.
Still, there are a few ways you can start to gather transport consumption data:
- The ideal and most accurate way is to use actual fuel consumption, measured in liters of diesel, petrol, LPG and so on as input data.
- For companies that use fuel cards, or who refuel in house, you may have most or all transport data stored there.
- If this data exists it should then be quite straightforward to calculate energy and emissions with commonly available emission factors.
- Where this data isn’t available, estimations are acceptable. This might come from mileage from driver logbooks. Mileage can be used in conjunction with engine size to estimate fuel use.
- Fuel spend is usually also available as part of internal costs. It can be multiplied by average fuel costs to arrive at an approximate fuel consumption value.
Keep in mind, there are exemptions applicable under SECR. For example, it is possible to leave out certain energy and carbon information from your company’s report if it is truly impractical to obtain, but you’ll need to explain what you’re leaving out and why it isn’t possible to include it.
The EEA’s analysis of European progress toward climate and energy targets provides another useful footnote to this discussion. It says that new legislation in the areas of transport are expected to help reverse the current upwards trend in transport emissions. Moreover, it aims to ensure Europe stays competitive and able to respond to the increasing mobility needs of people and goods. This also applies for any organization: For firms concerned about extra reporting burdens, the key is to understand that by driving down transport emissions, you are driving down spend and gaining competitive edge.
Schneider Electric helps its clients with reporting services and software to ensure hassle-free compliance with these types of legislation, so should you need any help, we will be at your disposal. Contact us!