What is the Carbon Emission Reduction Target (CERT)?
The Carbon Emissions Reduction Target (CERT) 2008 – 2012 follows on from the Energy Efficiency Commitment (EEC) 2005 – 2008. Revised in 2009 and further revised in 2010 and 2011, the CERT requires gas and electricity suppliers to achieve targets for a reduction in carbon emissions generated by the domestic sector.1
The government sets the overall carbon emissions reduction target to be collectively achieved by suppliers between 1 April 2008 and 31 December 2012. The target is 293 million tonnes of carbon dioxide (lifetime).
What does the CERT legislation say?
The Order requires licensed gas and electricity suppliers, that have a certain number of domestic customers (either individually or as part of a group of companies), to meet a carbon emissions reduction obligation. This is set by Ofgem, who apportion the overall target in relation to each obligated supplier’s domestic customer numbers.
The CERT legislation was revised in 2009, 2010 and 2011. Existing provisions within the Order include:
- A carbon emissions reduction target of 293 million lifetime tonnes CO2.
- A priority group obligation under which 40% of a supplier’s total obligation must be promoted to those aged 70 and over and those on qualifying benefits.
- A super priority group target was introduced under which 16.2 million lifetime tonnes CO2 must be promoted to those on certain qualifying benefits, for example low income households in receipt of child tax credits.
- An insulation target was introduced under which 73.4 million lifetime tonnes CO2 must be met by promoting professionally installed insulation measures (e.g. cavity wall and loft insulation).
- Suppliers that individually, or within a group of companies, have over 250,000 domestic customers are obligated under the Order.
- Suppliers may meet up to 10 per cent of their total obligation with market transformation and demonstration actions, which are reserved for innovative measures and technologies. This is increased to 12 per cent where 2 percent is achieved through promotion of microgeneration measures.
- Suppliers may meet up to 12.5 per cent of their priority group obligation through the priority group flexibility mechanism, which provides an uplift to the carbon saving score for solid wall insulation (solid wall insulation is scored according to fuel type so this provision incentivises suppliers to target hard-to-treat and off-grid households).
- Halogens and compact fluorescent lamps were removed from the programme.
- Free, non professionally-installed measures must be requested in writing.
Microgen can only be promoted in the Super Priority Group.
What is Ofgem’s role?
Ofgem have procedures in place to assess suppliers’ schemes, and to oversee progress and compliance. Ofgem must be satisfied that the measures delivered through a supplier’s scheme will result in an improvement in energy efficiency and therefore a reduction in carbon emissions.
Ofgem’s role in approving measures
Suppliers achieve their carbon emissions reduction obligation by promoting measures that have one of several purposes – for example, ‘achieving improvements in energy efficiency’. These measures, or ‘actions’ (using the language of the legislation), must be approved by Ofgem.
Many measures consist of a supplier promoting a particular product, and in these cases Ofgem’s approval of the supplier’s measure is sometimes perceived to be approval of the product being used by the supplier. However Ofgem does not have statutory power to approve products.
Ofgem has adopted an administrative practice of identifying the carbon savings to be attributed to a product in the event that the product is used by a supplier to achieve the supplier’s obligation. Neither suppliers nor producers are permitted to use the Ofgem logo or Ofgem E-Serve logo in the course of marketing. Suppliers and producers must not represent to customers that a product is endorsed or approved by Ofgem.
If any customer has concerns that a supplier or company is using the logos or Ofgem E-Serve’s approval in this way, they can contact the CERT monitoring team at cert@ofgem.gov.uk.
If any customers have general complaints about advertising undertaken by energy companies to promote energy efficiency products they should contact the Advertising Standards Agency.
Why is energy efficiency important?
Using less energy was highlighted in the government’s Energy White Paper 2007 as being a cost effective way of achieving cuts in carbon emissions. Reducing energy consumption can also improve productivity, reduce household energy bills, and contribute to improved security of energy supply.
The government has committed to the continuous delivery of carbon savings from the domestic sector using some form of supplier obligation until at least 2020. The CERT is part of this and will contribute to the government’s overall Climate Change Programme by cutting carbon emissions in the domestic sector.
Helping lower income customers and the elderly
Under the CERT activity equivalent to at least 40 per cent of the target must be targeted at certain low-income domestic consumers or those who are over 70 years old and on certain credits and benefits called the Priority Group.
In addition 16.2 million lifetime tonnes of carbon dioxide must be targeted at the Super Priority Group which includes people claiming specific credits and benefits income-related Employment and Support Allowance, income-based Job Seeker's allowance, Income Support and State Pension Creditor or who have parental responsibility for a child under 5 years of age who lives with them; hence the programme also contributes to the government’s Fuel Poverty Strategy.
1. The Electricity and Gas (Carbon Emissions Reduction) Order 2008 and its amending orders The Electricity and Gas (Carbon Emissions Reduction) (Amendment) Order 2009, The Electricity and Gas (Carbon Emissions Reduction) (Amendment) Order 2010 and The Electricity and Gas (Carbon Emissions and Community Saving) (Amendment) Order 2011 (the Order) provides the statutory basis for the CERT.
Below are all the documents relating to the CERT programme, and also its predecessor the Energy Efficiency Commitment.