The Growing Sector: A Shift Towards Renewable Electrification

The energy landscape is evolving rapidly. With advancements in technology and increasing regulatory support, businesses are moving away from fossil fuels and embracing clean electricity. Renewable electrification is a key pillar in the broader renewable energy strategy, offering improved energy efficiency, lower emissions, and long-term financial benefits.

At Northmore Gordon, we’ve seen a surge in interest from clients looking to electrify their operations, from manufacturing facilities to commercial buildings. The benefits are clear: reduced exposure to volatile fossil fuel prices, enhanced energy security, and alignment with corporate sustainability goals as the grid continues to green. 

For high temperature applications, where electrification isn’t economically viable, there is growing interest in green gas, especially biomethane.  Northmore Gordon will do article on that next time.

How Much is Being Spent on Electrification?

Electrification is a multi-billion-dollar movement. Australian businesses and governments are investing heavily, with state and federal funding exceeding $2 billion in recent years. Individual projects range from $100,000 for small commercial transitions to over $50 million for large industrial sites.

The Step-by-Step Process for Electrification

Transitioning to electrification requires careful planning. Our approach ensures businesses maximise benefits while mitigating risks:

1. Energy Audit & Feasibility Study – Assess energy usage, identify high-energy processes, and evaluate electrification opportunities.
2. Technology Selection – Determine the most suitable technologies (e.g., electric heat pumps, battery storage).
3. Financial & Incentive Analysis – Identify applicable government grants, tax incentives, and funding.
4. Project Design & Engineering – Develop an electrification plan with energy management strategies.
5. Implementation & Integration – Install electrification technologies and integrate with existing systems.
6. Monitoring & Optimisation – Track performance, fine-tune efficiency, and ensure cost savings.

Government Incentives: Making the Transition Viable

Governments at both state and federal levels are supporting businesses in their transition to renewable electrification. Incentives such as grants, tax rebates, and financing options help offset costs. For example, Australia’s Renewable Energy Target (RET) and state-based schemes support solar, wind, and battery storage investments.

Navigating these incentives can be complex. That’s where we come in.

Understanding the Risks: Technology & Supply Challenges

While the opportunities in electrification are immense, businesses must be aware of potential risks:

1. Technology Suitability – Not all solutions fit every business model; options include combinations of heatpumps, heat recovery, electrical and thermal storage and more.
2. Electricity Supply Stability – Businesses may need to explore battery storage or demand management.
3. Upfront Costs & ROI Uncertainty – A clear financial strategy is essential.

By partnering with Northmore Gordon, businesses can navigate these risks confidently, leveraging expert insights to make informed decisions.

How Northmore Gordon Works with You

At Northmore Gordon, we take a strategic approach to electrification, ensuring businesses maximise benefits while minimising risks. Our team helps clients:

• Assess energy usage and identify opportunities.
• Navigate and apply for funding and incentives.
• Design and implement tailored electrification strategies.
• Monitor and optimise energy performance post-implementation.

We’ve worked with numerous clients to transition to renewable electrification successfully. Read our case studies here.

Real-World Business Cases: Electrification in Action

Several companies have transitioned to electrification, demonstrating economic and environmental benefits:

• Manufacturing: A food production facility replaced gas-fired boilers with electric heat pumps, reducing energy costs by 25%.
• Commercial Buildings: A corporate office switched to an electrified hot water and HVAC systems, lowering emissions by 40% while accessing rebates.
• Industrial Processing: A mining company implemented electric arc furnaces, cutting costs and securing renewable energy contracts.

Environmental Certificates & Compliance

Businesses transitioning to electrification can benefit from various environmental certificates:

• Large-Scale Generation Certificates (LGCs): For businesses generating renewable electricity.
• Small-Scale Technology Certificates (STCs): Available for smaller solar, wind, and battery projects.
• State-Based Incentives: Such as the Victorian Energy Upgrades (generating VEECs) scheme and NSW Energy Saving Scheme (generating ESCs)

The Future of Electrification: What’s Next?

Looking ahead, electrification will continue shaping the energy landscape. Advancements in smart energy management systems, battery storage, and integrated renewable solutions will offer new opportunities. Government policies will also evolve, helping businesses stay ahead of the curve.

The time to act is now. Whether you’re considering electrification for cost savings, emissions reduction, or operational resilience, Northmore Gordon is here to guide you.

Get in touch with our experts today and let’s power your business into the future.

Disclaimer: The information in this article is general only and has been prepared without considering your business’ particular circumstances and needs. You should assess or seek advice from Northmore Gordon Environmental (AFSL 533927) on whether it is appropriate for your business’s objectives.

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The Australian Government’s Safeguard Mechanism is a federal policy aimed at reducing emissions from Australia’s largest industrial facilities.   

Key messages 

• The largest 215 facilities in Australia, emitting over 100 ktCO₂-e p.a., fall under the Safeguard Mechanism. 

• These sites must reduce emissions by 4.9% p.a. or surrender ACCUs or SMCs. 

• Sites that reduce emissions beyond 4.9% p.a. can register SMCs and trade them. 

• The Safeguard site represents the largest potential demand for ACCUs, and the quantity of SMCs registered has a direct impact on ACCU prices. 

Obligations Under the Safeguard Mechanism  

Facilities emitting over 100,000 tCO₂-e (Tonnes of CO₂ equivalent) must operate within specific emissions baselines and to reduce these emissions by 4.9% p.a. in line with 43% reduction (on 2005 levels by 2030) and net zero by 2050. 

In 2023-24, total emissions from the 215 safeguard facilities were approximately 136 MtCO₂-e, down from 138.7 MtCO₂-e in 2022-23.  

Managing Emissions: SMCs and ACCUs 

Facilities that emit below their declining baselines can earn Safeguard Mechanism Credits (SMCs), which can be sold to other entities or banked for future compliance needs. Whilst facilities exceeding their baselines must offset the excess emissions either by surrendering SMCs or Australian Carbon Credit Units (ACCUs). 

Trading SMCs and ACCUs: Supply and Demand 

Following the 2024 reporting period  

• Supply: over 8 million SMC units have been issued to 57 facilities.  This was much higher than anticipated. 

• Demand: the CER estimates that excess emissions from 144 facilities will require 9.2 MtCO₂-e surrendered either from SMCs or ACCUs 

The market had expected a much lower number of SMCs to be issued and hence much more of the existing 50M in ACCU holdings to be consumed in the first year of surrender under the revamped Safeguard mechanism. 

In early March, Core Markets reported that SMCs commenced trading in the brokered markets, and at a slight discount of $0.50 to $1.00 to the ACCU price ($33.25), presumably this reflects that SMCs can only be used for Safeguard sites. 

In preparation for the Safeguard Mechanism we can see that over 50% of the ACCUs in holding accounts are being retained by Safeguard sites. 

Impact on ACCU Prices 

The introduction and trading of SMCs influences the ACCU market. An increase in SMC availability can lead to a reduced demand for ACCUs, potentially stabilising or lowering their market price. Conversely, if fewer SMCs are issued than anticipated, facilities may turn to ACCUs to meet compliance, thereby driving up prices. In late 2024 the ACCU price rose substantially, likely in anticipating of the increased demand under the Safeguard.  However, with the large number of SMCs being issued for sites being under their baseline emissions, the ACCU prices retreated to prices similar to mid 2024.  

Distinguishing Between SMCs and ACCUs 

While both SMCs and ACCUs serve as instruments to offset emissions, their origins differ. SMCs are exclusive to the Safeguard Mechanism, awarded to facilities that operate below their emissions baselines. In contrast, ACCUs are generated from a broader range of projects, including land-based carbon sequestration and energy efficiency initiatives. Facilities under the Safeguard Mechanism can utilize either SMCs or ACCUs to meet their compliance obligations.  

Forecast and Registration of SMCs 

The Clean Energy Regulator (CER) had projected the issuance of SMCs based on anticipated emissions performances. However, the actual number of SMCs registered can vary due to factors such as operational changes and emissions reduction initiatives implemented by facilities. Detailed statistics on the forecasted versus actual SMC registrations for the December Quarter 2024 are available in the CER’s Quarterly Carbon Market Report.  

Cost Containment Mechanism 

To prevent excessive compliance costs, the Safeguard Mechanism incorporates a Cost Containment Measure. This mechanism ensures that ACCU prices remain within a manageable range, providing price predictability for facilities. The CER sources ACCUs for this purpose from various channels, including those delivered under Commonwealth carbon abatement contracts.  One source for the CCM is that those exiting their ERF contracts (through a mechanism known as the “buyers damages” clause) must still deliver 20% of the contracted volume to government at the auction price from their agreement. 

Implications for Facilities and ACCU Market Dynamics 

Facilities regulated under the Safeguard Mechanism must proactively manage their emissions to stay within declining baselines. This necessitates investing in emissions reduction technologies or securing sufficient credits (SMCs or ACCUs) for compliance. The interplay between SMC issuance and ACCU demand is crucial; a shortfall in SMCs can heighten ACCU demand, influencing market prices.  

In summary, the Safeguard Mechanism plays a critical role in steering Australia’s industrial sector towards sustainable practices. Understanding the nuances of SMCs, ACCUs, and their market implications is essential for facilities to navigate compliance effectively and contribute to national emissions reduction goals. 

Take “direct action” with Northmore Gordon 

Looking for energy efficiency or decarbonisation projects? Need expert guidance on your ACCU and SMC strategy? Whether you’re looking to secure forward contracts, explore energy-saving opportunities, or navigate compliance requirements, Northmore Gordon can help. 

Consider not only your carbon strategy, but also renewable energy and energy efficiency to maximise the value from environmental attribute certificates. 

Disclaimer: The information in this article is general only and has been prepared without considering your business’ particular circumstances and needs. You should assess or seek advice from Northmore Gordon Environmental (AFSL 533927) on whether it is appropriate for your business’s objectives. 

The post Demystifying the Safeguard Mechanism and the ACCU Market  appeared first on Northmore Gordon.

The credibility of these initiatives depends heavily on the quality of the environmental certificates, as not all are created equal, and some have recently come under fire. This article explores this range of quality, tools, and financial mechanisms and discusses strategies for avoiding greenwashing accusations to make use of what is still a very important mechanism for the world to decarbonise. 

Disclaimer: Northmore Gordon (NG) has a deep understanding of certificate markets, and the requirements of all the leading decarbonisation programs & protocols and helps customers build actual emission reduction pathways.  NG has originated over 5 million certificates from a wide range of projects and has delivered for customers ‘Buy & Retire’ of certificates across 18 markets, covering 23 countries.  NG holds an Australian Financial Services License.  Information in this article is general in nature and shall not constitute advice. 

Understanding the use of RECs and Carbon Credits 

RECs and especially Carbon Credits, whilst providing an immediate solution are one mechanism to incentivise others to reduce emissions.  Businesses should always be working in parallel on their own renewable energy assets and emissions reduction projects within their business.  Internal projects, such as energy efficiency can have a negative long-term cost.  Internal projects come at high CAPEX, whilst RECs and offsets come from OPEX budgets.  

Using Renewable Energy Certificates (RECs) 

RECs represent the environmental attributes of renewable energy production. By purchasing and retiring RECs, businesses claim the green benefits of the equivalent renewable energy generation for their site and promote renewable sector growth. 

International RECs (I-RECs) are globally recognised, while in Australia, businesses can purchase Large-scale Generation Certificates (LGCs). 

Understanding Carbon Credits to Offset 

Carbon offsets are credits generated by projects that reduce, avoid, or remove greenhouse gas (GHG) emissions. Companies buy and retire these credits to offset their own emissions. The range of projects offering these offsets can include forest conservation, replanting, renewable energy, methane capture, waste and wastewater treatment, energy efficiency projects, fuel switching and many others. 

Globally, Verified Carbon Standard (VCS), Gold Standard, and United Nations’ Clean Development Mechanism (CDM) are popular choices. In Australia, the Carbon Farming Initiative (CFI) aka the Emissions Reduction Fund (ERF) is used by businesses seeking to offset emissions using Australian Carbon Credits Units (ACCUs). 

Choosing High-Quality Projects 

The quality of RECs and Carbon Credits varies. A credible REC or Offset (such as LGCs, I-RECs, some VCUs, and ACCUs) are issued under a trusted certification body (e.g. Evident for I-RECs and the CER for LGCs) and represents renewable energy that is additional (i.e., the energy wouldn’t have been generated without the incentive provided by the REC).  

Carbon Offsets have come under greater criticism that RECs; High-quality offsets are transparent, verifiable, permanent, and provide additional carbon reductions that wouldn’t have happened without the offset project. They should be certified by reputable standard-setters like VCS or Gold Standard, which ensure the environmental integrity of the project and the offset.  Today rating agencies (such as BeZero, Calyx, Sylvera, and IDEAcarbon) now exist for Carbon Credits and RECs.   

When selecting projects for carbon offsets or RECs, businesses should screen projects and choose those: 

1. With strong environmental benefits (the type of project),  

2. From registered in recent years (new vintage),  

3. From stable countries with strong compliance (in the same country as their emissions),  

4. With co-benefits, such as social impact, local employment, and additional sustainability outcomes, 

5. Certified to high standards such as a Gold Standard project, and 

6. That aligns with their overall corporate image and goals

Avoiding Greenwashing 

To avoid being accused of greenwashing (misleading or unsubstantiated claims about the environmental benefits) – businesses must ensure transparency in their decarbonisation efforts.  The press and shareholder activists are exposing businesses using low-quality projects to offset their emissions or making improper claims. Accusations of greenwashing can be reduced by using Credible Standards & Registries, performing measurement and third-party verification, providing transparency & accuracy about the originating project and following The Integrity Council for Voluntary Markets “Core Carbon Principles” 

Financial Mechanisms for RECs and Carbon Credits 

Planning a long-term decarbonisation strategy necessitates considering not just the environmental, but also the financial implications of engaging with offsets and RECs. Forward-looking financial strategies such as hedging, offtake agreements, options, and warehousing of offsets can provide companies with more control over their sustainability efforts while mitigating financial risks. 

1. Spot Purchase whilst the simplest contract, has the lowest counterparty risk, but the buyer is exposed and taking whatever the price is at the time. 

2. Hedging or Forward Contracts can be put in place to forward purchase RECs and Carbon Credits for risk management to avoid potential losses by price fluctuations. Strip (forward) contracts can fix prices for multiple years into the future. 

3. Warehousing is being used by companies due to the arbitrage that exists between current and future prices.  High-quality carbon credits are expected to increase in price as low-cost abatement opportunities dry up.  

4. Options the right to buy (or sell) without the obligation, are generally harder to obtain or expensive, and not easily obtained for years into the future. 

5. Regulatory Risk means that the price of RECs and Carbon Credits are very sensitive to policy or regulatory changes. 

As CFOs, sustainability managers, and other executives navigate their decarbonisation journey, carbon offsets and RECs offer powerful tools to meet environmental goals. However, due diligence is critical in choosing the right projects and certificates to support genuine, effective climate action and avoid the pitfall of greenwashing. By aligning with robust standards, seeking third-party verification, and committing to transparency and science-based targets, businesses can not only help mitigate climate change but also build their credibility as sustainable leaders in their industry. 

Northmore Gordon has been advising businesses on their decarbonisation strategy for almost 15 years and can provide a full range of carbon, energy and certificate services for your business today.

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What are VEECs and ESCs? 

VEECs and ESCs are certificates that represent the energy savings generated by a project. A VEEC represents one tonne of carbon dioxide equivalent (tCO2-e) saved, while an ESC represents one megawatt-hour (MWh) of electricity saved. These certificates can be sold to liable entities, such as energy retailers, to meet their mandated targets for reducing greenhouse gas emissions and promoting energy efficiency. 

How to earn VEECs and ESCs

To earn VEECs and ESCs, businesses need to implement energy efficiency and energy savings measures, such as upgrading their HVAC systems, installing LED lighting, and implementing energy-efficient processes. By doing so, businesses can reduce their energy consumption, which in turn generates VEECs and ESCs. These certificates can then be sold to offset the cost of the energy efficiency project or generate additional revenue. Check out our article on Carbon Accounting for more details on earning and offsetting.

Benefits of VEECs and ESCs for Medium and Large Businesses 

Implementing energy efficiency projects can be costly and time-consuming. However, by earning VEECs and ESCs, businesses can offset the cost of the project and generate additional revenue. The financial incentive provided by VEECs and ESCs can help businesses achieve shorter payback periods, making energy efficiency projects more financially feasible. 

In addition to financial benefits, VEECs and ESCs can also help businesses improve their energy efficiency and sustainability. By reducing energy consumption, businesses can lower their carbon footprint and demonstrate their commitment to sustainable practices. 

– Check out how some of our clients have used VEECs and ESCs

Aurora Place Boosts Revenue across Sydney Skyline

Aurora Place, a commercial building in Sydney, needed to reduce its energy consumption to save money and demonstrate its commitment to sustainable practices. Northmore Gordon implemented an energy efficiency project, which involved overhauling the site’s HVAC chiller system, replacing existing chillers, base building cooling tower upgrades, variable speed drive (VSD) replacement on chilled water and condenser water pumps, upgrades to the outside air variable control, and hot water coil bypass dampers. 

Northmore Gordon created energy savings certificates (ESCs) using measurement and verification (M&V) methodologies on the site’s consumption before and after the implementation of the HVAC works. The M&V process also allowed Northmore Gordon to monitor the energy savings as a result of the project. The creation of ESCs for this project provided more revenue to further improve the performance of the building. 

The project generated 309,000 kWh of annual energy savings, which resulted in a certificate value of approximately $46,000. The program used was the NSW Energy Savings Scheme (ESS), and the method used was Project Based Activities (PIAM&V). 

Challenges of the project included aging equipment that could impact reliability, and the M&V process discovered a fault in the control system. 

Northmore Gordon’s role was to complete the M&V plan, collect site data and supporting evidence, and build the baseline and operating energy models to calculate the energy savings. Northmore Gordon also provided Aurora Place with price certainty to ensure the customer received the payment they had forecast. Read more here.

Molycop Strives for Greater Sustainability

Molycop, the largest and most experienced manufacturer and supplier of grinding media to mining operations worldwide, wanted to achieve greater sustainability through superior resource efficiency and define a new standard of environmental performance. Northmore Gordon helped Molycop achieve annual energy cost savings and maximise their return on investment in energy projects since 2006 through energy management strategies, energy audits, grants and funding options, project development support, energy and carbon reporting, and energy and carbon certificates. 

Northmore Gordon adopted a systematic approach to identifying and prioritising energy and carbon management opportunities. This included investigating capital projects, low-cost process improvements, government funding, and revenue from energy and carbon certificates. 

Northmore Gordon’s Energy and Carbon Consultants helped Molycop access over one million dollars worth of revenue through the NSW government’s Energy Saving Scheme and capital grants. Northmore Gordon also assisted Molycop in their purchasing of renewable energy through a corporate Power Purchase Agreement. 

Some projects that have been implemented include installing variable speed drives on large fans and pumps, including high voltage motors, improving furnace controls, improving furnace heat recovery systems, modifying controls on fume extraction and cooling systems, reducing pilot flame gas consumption, installing heat recovery on ladle preheating equipment, improving yield, upgrading bag house, and cooling tower upgrades. 

Through Northmore Gordon’s multi-disciplinary approach, Molycop’s energy savings have grown to over $1.5M per annum. The consequential reduction in greenhouse gas emissions has resulted in 15K tonnes of corresponding carbon emissions abatement each year. This has resulted in over $12M. Read more here.

Working VEECs and ESCs into your Net Zero Strategy 

As the global focus shifts towards net-zero emissions, businesses need to develop strategies to reduce their carbon footprint. VEECs and ESCs can play a vital role in achieving these goals by providing a financial incentive to implement energy efficiency projects, whilst still allowing businesses to record the emissions reductions from these projects. Northmore Gordon can help identify energy efficiency opportunities and hit your net-zero goals while benefiting financially through VEECs and ESCs. 

Why Northmore Gordon? 

Northmore Gordon is an accredited partner in the VEU and ESS program and can offer support by facilitating the creation of VEECs and ESCs through eligible energy upgrade projects. Our team of experts specialise in identifying energy efficiency opportunities and can help businesses move closer to their decarbonisation goals while benefiting from financial incentives. 

Implementing energy efficiency and energy savings measures can benefit businesses by reducing their electricity and gas consumption, saving money, and demonstrating their commitment to sustainable practices. VEECs and ESCs can provide a financial incentive to implement these projects, making them more financially feasible for your business. Northmore Gordon is your chosen partner to help your business reduce energy consumption and operating costs while continually improving energy efficiency and sustainability.

Contact us today to learn more about how we can help you achieve your energy goals. 

The post How VEECs and ESCs Can Help Your Business Achieve Energy Efficiency and Sustainability Goals appeared first on Northmore Gordon.

Energy efficiency must be a staple of our transition if we are reach a net zero economy in alignment with the Paris Agreement. In addition to mitigating impacts of climate change, reduced energy demand strengthens energy security by helping companies be less reliant on external sources.

Implementing effective solutions first requires good data. Utility benchmarking should be a top priority for all companies and organizations who wish to advance their decarbonisation efforts and take greater control of their own energy security.

The Importance of Utility Benchmarking

Utility benchmarking is something every plant can do without delay and has a number of benefits.

• Utility performance can be compared to peers and industry standards. Without utility benchmarking, a company won’t know where their performance ranks, much less have insight into opportunities for improvement. This makes utility benchmarking one of the most useful practices for companies wanting to gain a competitive advantage.
  
• Utility performance can be benchmarked across sectors. Because these industrial equipment are widely used across industries, there is ample professional capacity to measure and improve their performance, and support their operation.

• Utility benchmarks can be reliably adjusted to climate or operating conditions. Using statistical modelling techniques, companies can compare utility performance across regions by adjusting for significant factors, like operational activity and weather patterns.

Example: Compressed Air

This snapshot shows the measured performance of 25 industrial compressed air systems in Singapore. By using measured data, our customers are now informed on:

• How they perform relative to their peers
• What best practice is, and
• How much money they would be able to save if they achieved best practice performance.

Need for Widespread Adoption of Utility Benchmarking

Despite the clear advantages of utility benchmarking, most companies don’t do it unless compelled to do so by a regulatory requirement. This may be because of the perceived cost of metering, or skepticism about the possible savings. Yet benchmarking opens the door for companies to take advantage of the most economic and effective near-term solution for driving down emissions and energy demand. If wanting to minimise capital investment, companies can choose to use temporary metering, a service Northmore Gordon provides. 

Globally, there is a growing trend of implementing building energy codes and industrial energy efficiency standards. For instance, Singapore will require all chilled water systems over 300RT in capacity to meet an energy efficiency standard. Therefore, companies that engage in utility benchmarking and energy efficiency programs will insulate themselves from transition risks associated with this growing regulatory trend.

Taking a Comprehensive Approach

It is vital to use a certified energy management team to measure performance accurately and help drive a comprehensive strategy. Northmore Gordon’s team of energy experts is available to help companies realise the economic and strategic benefits of utility benchmarking. Our support alleviates stress from companies’ internal teams while helping them advance their sustainability program and align their decarbonisation pathway and financial objectives.

The post Why Benchmarking of Factory Utilities Is Key To Unlocking Potential of Energy Efficiency appeared first on Northmore Gordon.

Climate Active is a certification program that allows the Australian government to recognise businesses reaching a carbon-neutral status. Certification is available for a number of applications, including buildings, events, organisations, precincts, products, and services.

Becoming certified requires that organisations: 

• Assess and create an inventory of their carbon emissions 
• Implement measures to reduce emissions 
• Purchase carbon offset credits to counterbalance remaining emissions   

Being Climate Active certified verifies and validates companies’ carbon neutral claims, enabling Climate Active companies to showcase climate leadership and social responsibility. As consumers increasingly search for purpose-driven brands, the Climate Active certification stands as a way to rise above the crowd and display leadership in sustainability.  

What Companies Are Climate Active  

Hundreds of companies are already recognised by Climate Active, giving consumers plenty of opportunities to make sustainable purchasing and lifestyle decisions. Some notable Climate Active organisations include:  

• Australia Post — the Australian postal services company received certification for carbon-neutral products and services after implementing several energy efficiency improvements, undergoing electrification of processes and purchasing carbon offset credits.   
   
• Lion — this Australian food & beverage company has been certified carbon-neutral as an organisation. Alongside its purchasing of carbon offset credits, the company is following through on commitments to generate and procure more renewable energy.  

• Commonwealth Bank — The financial institute is Climate Active accredited as an organisation. With a strong commitment to procuring clean electricity, Commonwealth Bank has installed several on-site solar systems to generate and procure clean renewable energy. 

• Qantas — The international airline is Climate Active certified for its service. With the majority of emissions stemming from burning jet fuel, their emissions reduction strategy involves improving fuel efficiency, transitioning to less carbon-intensive fuels, and improving fleet efficiency. Qantas also participates in carbon offsetting through purchases of VCUs, ACCUs, and Voluntary Emissions Reductions (VER).  
   
• REA Group — Certified as an organisation, the digital advertising company established a detailed action plan to reduce emissions by transitioning to renewable energy sources for electricity as well as implementing behavioural and procedural changes in the workplace.   

How To Become Climate Active Certified  

Climate Active administers certification and maintains the standards required to be deemed carbon neutral. Becoming Climate Active certified is a multistep process that starts with applying and ends with a public disclosure statement being published on the Climate Active website.  

Step 1: Apply 

The first step is to apply to Climate Active. Northmore Gordon often manages this step for our clients to make the process quick and easy. Upon approval, the company enters into a license agreement with Climate Active.  

Step 2: Calculate emissions  

Next, the company must determine its greenhouse gas (GHG) emissions. This provides a benchmark figure for the company to actively reduce, and the process of developing a carbon inventory – which Northmore Gordon assists in doing – highlights opportunities to improve energy efficiency and reduce scope emissions.  

Step 3: Reduce Emissions 

Once emissions are calculated, the company must work to reduce them. This can involve a variety of strategies: reducing energy usage through operational changes, such as adopting video conferencing in place of conducting air travel for meetings; transitioning to the use of certified carbon neutral products and services; implementing strategies like heat recovery systems that optimise energy use and lower fuel demand; improving energy efficiency through equipment upgrades; and electrifying processes, such as transitioning to electric vehicles or procuring more electricity from renewable energy sources.  

As experts in commercial energy use and energy efficiency practices, Northmore Gordon helps companies realise the most effective strategies to adopt in their transition to carbon-neutral operations.  

Step 4: Purchase Carbon Credits  

After implementing emissions reduction strategies, remaining residual emissions are to be offset via the purchase of carbon offset credits. These credits represent reduction in emissions and come from various activities that support clean energy projects – such as solar or wind farms – or promote carbon sequestration practices, such as reforestation initiatives or programs that preserve natural carbon sinks. The diversity of carbon offset credit programs leads to ranging efficacy, and Northmore Gordon helps companies to select and purchase reputable credits to ensure the company feels confident and proud of their emissions reduction strategy.  

Once a company has effectively cancelled out its remaining emissions through sufficient purchase of offset credits, the company reaches carbon neutral status.  

Step 5: Validate claim 

A company’s claim that it has reached carbon neutral status has to be validated by an independent third-party. This validation confirms the company accurately reflected their carbon inventory, made appropriate adjustments to reduce emissions, and offset residual emissions through reputable carbon offset credits.  

Step 6: Receive certification  

Once the claim has been verified, Climate Active will provide certification and publish the company’s public disclosure statement to the Climate Active website. This showcases the credibility of the company’s claim and assures consumers that the company has taken meaningful steps to reducing its emissions.  

Support With Climate Active Certification 

If energy is not the primary focus of your business, then it can be challenging to move through the assessment, implementation, and application stages of the Climate Active certification process.  

Northmore Gordon is on a mission to help organisations and industrial businesses boost profitability through decarbonisation and improved energy efficiency. With our team of energy experts, we can navigate the Climate Active process with your company to assure you reach your sustainability goals and optimise savings. If you want to declare environmental responsibility to your customers and community, then reach out today and we’ll work to make Climate Active part of your sustainability plan.  

The post Climate Active Organisations Pave The Way For Sustainable Action appeared first on Northmore Gordon.

But what is green hydrogen? And for that matter, what are all the other colours of hydrogen?

Black hydrogen. Gray hydrogen. Blue hydrogen. Green hydrogen…

All hydrogen is colourless and odourless — the hydrogen rainbow simply defines how the hydrogen was produced. While the structure and properties of the hydrogen molecule do not change between the colours, the production method does play a significant role in how carbon-intensive the hydrogen lifecycle is.

Black & Brown Hydrogen — The Dirtiest

Black and brown hydrogen are both produced from the fossil fuel coal-black hydrogen is from bituminous coal and brown from lignite. These are the dirtiest methods of hydrogen production because it is created through the gasification of coal, which releases CO2 and other greenhouse gasses into the atmosphere. 

Gray Hydrogen — The Most Common

Gray hydrogen is produced from natural gas, and it is the most common type of hydrogen produced and used worldwide. The primary process used in gray hydrogen production is steam-methane reforming, a reaction involving natural gas, steam, and heat that works to isolate hydrogen. In addition to hydrogen gas, the process also creates CO and CO2 which are released into the atmosphere.

Although using natural gas is not as carbon-intensive as gasification of coal, it is still a fossil fuel. As such, its use in hydrogen production is non-renewable and emits GHG emissions that contribute to climate change. 

Blue Hydrogen — Low-Carbon Intensity

Blue hydrogen is also produced from natural gas, but the process involves carbon capture and storage (CCS) technology that prevents the majority of carbon emissions created by the steam reforming process from being released into the atmosphere.

Due to the involvement of CCS technology, blue hydrogen has a reduced carbon intensity and may even be referred to as carbon neutral (although that may be a bit misleading as the CCS technology will not capture 100% of the GHG emissions).

Blue hydrogen production is less carbon-intensive than black, brown or gray hydrogen, but its dependence on fossil fuels does not make it as environmentally sound as green hydrogen.

Green Hydrogen — The Cleanest

Green hydrogen is often referred to as ‘clean hydrogen’ because it is produced using electricity from clean energy sources — such as solar or wind power — to split water into hydrogen and oxygen atoms through a process called electrolysis.

Because solar and wind power do not emit greenhouse gases when delivering electricity, this green hydrogen method offers a clean alternative to hydrogen production. Although it is not yet economically competitive at a commercial scale, green hydrogen could be a major contributor to decarbonizing hard-to-abate sectors such as steel manufacturing and the chemicals industry, which rely on fossil fuel feedstocks in the production process.

In addition to replacing portions of gray hydrogen, green hydrogen also poses potential as a clean hydrogen source for the transportation, building, and power sectors. Green hydrogen can serve as a key precursor ingredient in producing synthetic jet fuel and derivatives. Adopting this clean fuel would allow the shipping and aviation industries, which have been historically difficult to decarbonise given the infeasibility of direct electrification, to transfer to low-carbon intensive fuels and effectively reduce their GHG emissions.  

There are several barriers to the widespread adoption of green hydrogen, such as constructing refuelling infrastructure, lowering costs, and developing storage strategies. The buzz around green hydrogen is growing, and as it becomes a more popular option, analysts assert that it will become more economic than gray hydrogen.   

Future Outlook For Hydrogen

Talk on hydrogen is trending, yet it’s important to note that hydrogen production is a mature market that has served the international industry for decades. Hydrogen is used as an industrial feedstock in prominent processes such as oil refining and ammonia production. Hydrogen production has increased over the past decade, a trend that is anticipated to continue for the foreseeable future.

Advancements and scaling of green hydrogen technology could play a significant role in replacing gray (black & brown) hydrogen, and it could also provide clean fuel for transportation or stored energy to complement intermittent renewable energy sources. Considering how economic solar and wind power have become, it is now critical that we develop innovative techniques and strategies to drive down capital costs of electrolytic equipment and to effectively interconnect hydrogen solutions into our energy framework. Doing so will open up incredible potential for hydrogen to complement the larger global transition to a clean energy economy.  

Australia is actively embracing opportunities around hydrogen. Green hydrogen energy hubs are part of the NSW Renewable Energy Zone (REZ) buildout plan, and The Australian Renewable Energy Agency (ARENA) has secured $105 million to fund three commercial green hydrogen facilities slated for Victoria and Western Australia.

With national and international commitments to reduce carbon emissions and reach net-zero status by 2050, green hydrogen can play a critical role in decarbonising industry and establishing a reliable clean energy grid. So as the world transitions to a clean energy economy, green hydrogen may not only be a way for Australia to decarbonise… it could also be the nation’s next big export opportunity.

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The path to decarbonising the electrical grid is well underway. Now it’s time to think about gas. If you have high gas consumption, there are few things you need to be considering. 

1. Make your current equipment as efficient as possible 

2. Consider what equipment can be electrified 

3. Look for biogas or green gas opportunities 

4. Green hydrogen is getting massive investment 

The Victorian Industrial sector used over 110 PJ (30 TWh) of energy in 2017 and 65% of that came from gas. The predominant use of that gas is steam boilers. The story is the same in other states. The Industrial sector is primarily fueled by gas and the commercial sector also has substantial gas usage for hot water. 

The trends bring gas into the spotlight are as follows:

1. Electricity is getting greener. In Australia, 25% of the electrical energy is now sourced from renewables. The grid emissions (the emissions factor) are dropping every year. 

2. Many companies are setting goals to decarbonize, or their customers are demanding they do. 

3. The gas is getting greener (less emissions), but it is hard and slow, however there are state and federal programs accelerating this. 

4. Green hydrogen (electrolysis from renewable electricity) is forecast to explode 

The message for C&I (Commercial & Industrial) is clear if you want to decarbonize you’ve got to look at your gas emissions as well. 

Gas Efficiency: In NSW and VIC business there are lots of old steam boilers it’s a no brainer to add economizers and O2 trim, electronic air/fuel ration and blowdown controls or to upgrade the whole unit. The NSW Energy Saving Scheme and Victorian Energy Upgrades programs provide funding for both calculated and measured savings.  For economizers up to 50% of the full costs will be cover by the programs. 

Electrification:  For hot water, we’ve reached the cutover point. You’ll now generate hot water with lower emissions by using heat pump systems using grid electricity than a gas boiler. 

• Using gas at 90% efficiency condensing boiler to put 1GJ of energy into hot water would produce 0.05523 / 0.9 = 0.0061 x 1000 = 61 kg CO2te
• To put 1GJ of energy into hot water using an electric heat pump with a COP of 5 and grid source energy with an emissions factor of 0.8 tonnes / MWh. 1GJ of energy into hot water.  (1GJ = 1/3.6 MWh x 0.8 / 5 COP x 1000 kg = 44 kg CO2te.  And when the grid reaches 0.5 tonnes / MWh this falls to 27 kg CO2te and potentially better with some heat pumps having even higher COP

The NSW ESS (Energy Savings Scheme) and VIC VEU (Victorian Energy Upgrade) have recently released new methods for Commercial & Industrial heat pumps. Dairy farms and industrial processes using large volumes of hot water can substantially lower their emissions by using heat pumps and much more so if they have behind the Meter Solar PV. 

Biogas, Biomethane and Green Gas: For the process that really needs gas (e.g. steam boilers), there significant funding can be obtained from capturing or generating biogas. Biogas can come from anaerobic digestion (AD) and covered anaerobic lagoons (CALs), from abattoirs, landfills, and syngas from pyrolysis (eg burning agricultural waste in the absence of oxygen).  The VIC VEU program provides funding for switching from natural gas to biogas.  The NSW ESS supports heat recovery from burning biogas. By using scrubbers and other methods can be used to upgrade biogas to biomethane and the Carbon Farming Initiative (CFI) recently added biomethane to many of the methods to support injection into the natural gas grid. With these advancements, we are just starting to see the development of in front of the meter PPAs to supply green gas and the energy retailers would love to be able to offer it broadly. 

Green Hydrogen: There is a very substantial investment going into the hydrogen economy. The expectation is that electrolysis (using electricity to generate H2) will see the same economy of scale benefits that resulted in Solar PV dropping massively in cost. This space is a watch and see as to how the gas industry will evolve to replace natural gas (methane) with hydrogen. 

Northmore Gordon can support your business doing the activities above. Our consultants can help identify which of the opportunities above will have the highest PA payback and capture the greatest amount of funding under different programs.

More importantly, if you are feeling gassy and bloated, we’ll identify the fastest way to reduce your gas emissions. Who wouldn’t want that!!! 

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When it comes to goods and services, this exciting level of connectivity blurs lines between nation borders. Although this comes with advantages, it also makes solving issues such as climate change and supply-chain emissions a global problem — therefore, measuring greenhouse gas (GHG) emissions requires an international, standardized system so that governments, industries, and corporations can take a uniform approach to emissions measurement and reduction.

The Greenhouse Gas Protocol outlines a comprehensive method for measuring and reporting GHG emissions throughout an agency’s entire supply-chain. Emissions are divided into three broad categories: Scope 1, Scope 2, and Scope 3 emissions.

Scope 1 Emissions — Direct Emissions

Scope 1 emissions are produced directly within the boundary of your company facilities either from operations done on-site or using company-owned equipment. This can include activity from on-site fuel-burning, emissions from company vehicles, or emission leakages from operating a refrigeration system. Any emissions produced from resources owned or controlled by your company contribute to Scope 1 emissions.

Scope 1 emissions fall into four categories:

1. stationary combustion — emissions released from equipment that burns carbon-based fuels to generate heat. This includes emissions from equipment such as boilers, furnaces, ovens, and dryers.

2. mobile combustion — emissions from driving traditional internal combustion engine vehicles owned by the company.

3. fugitive emissions — emissions that unintentionally escape or leak from pressurized equipment, such as pipes, storage tanks, or compressors.

4. process emissions — emissions produced as a result or byproduct of chemical processes, such as CO2 emissions from steel smelting or cement manufacturing.

Since Scope 1 emissions are under your direct control, they can be effectively reduced by implementing energy-efficiency measures such as smart lighting and thermostats, heat recovery systems, or other energy-conservation techniques. Under the National Greenhouse and Energy Reporting (NGER) Act of 2007, companies are required to report their Scope 1 emissions.

Scope 2 Emissions — Emissions From Purchased Energy

Scope 2 emissions are indirect GHG emissions produced during the production of purchased energy. The energy can be used to provide electricity, deliver process steam, or heat and cool your facility. The power you use at your facility — whether it be to turn on the lights or control indoor temperature — is generated from somewhere else. When this power is purchased from a third party generator, such as a utility, then the emissions from that power generation contribute to your Scope 2 emissions.

For instance, the emissions produced at a natural gas plant when providing electricity to your business would count as your Scope 2 emissions. Of course, your Scope 2 emissions would be that natural gas plant’s Scope 1 emissions.

To lower Scope 2 emissions, consider alternative options that generate power from clean energy sources. In addition, examine ways to improve your own company’s energy efficiency. Doing so will lower your energy demand and consequently reduce the amount of power you need to pull from outside sources.

Similar to Scope 1, Scope 2 emissions must be reported under the NGER scheme.

Scope 3 Emissions — Emissions Along Wider Supply Chain

Scope 3 emissions are GHG emissions generated throughout your company’s supply chain but that come from sources that are not controlled or owned by your company. Scope 3 emissions look at the wider impact of upstream and downstream activity as it relates to the products and services your company provides. This may include emissions from extraction and production of raw materials, the end uses of products produced, the end-of-life product processing, or even the fuel emissions from employee commuting.

Because they come from a wider economy perspective, Scope 3 emissions can be the most difficult to control and can also be the greatest contributor to overall GHG emissions. For example, when Kraft Foods measured emissions across its entire supply chain, it found that 90% of total GHG emissions came from Scope 3 emissions.

The Greenhouse Gas Protocol describes 15 different activity types that make up Scope 3 emissions. Addressing these emissions requires transparent communication between constituents along the supply chain as well as a holistic understanding of the full product life-cycle of produced goods. Solutions may include incorporating more recycled material into your products, using less material in packaging, or even incentivizing employees to commute or travel less for work.

Scope 3 emissions are not reported under the NGER scheme, yet understanding them is a critical way to measure and create an effective plan to mitigate your company’s emissions across the wider economy. Understanding your scope 3 emissions also enables you to better understand your exposure to risks in a de-carbonising world

Measure your GHG Emissions now

Climate change impacts all of us. And it’s going to take all of us to drive solutions that steer us towards a healthier, more sustainable economy. To lower your emissions, establish effective programs, and implement the most impactful technologies, it is critical to measure and understand your GHG emissions. Identifying Scope 1, 2, & 3 emissions under the GHG Protocol will paint a comprehensive assessment of your company’s emissions. From there, we can develop a plan to lower emissions in a way that benefits the environment and your business’ bottom line.

We all have a role to play in decarbonizing Australia and creating a thriving economy. At Northmore Gordon, we are deeply involved in energy and carbon management, and we are here to help you assess your emissions and navigate a plan that works well for the longevity of your business and our community. We provide the support you need so that you can make the impact our state deserves.

Reach out today to measure your GHG emissions and get started on a practical mitigation plan.

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