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OPINION: EU carbon market in the crossfire of the energy crisis and legislative changes

By Riham Wahba, Market Analyst at Vertis Environmental Finance
The EU ETS, covering Europe’s carbon-intensive industries, establishes emission reduction targets for more than 11,000 installations. Such entities were responsible for more than 1.3 billion tons of CO2 emissions in 2021.
Besides these companies, in 2018, the European Commission opened the market to financial entities; hence, EUAs (in practice, a “permit” to emit 1 ton of CO2) shared some traits with financial derivatives. However, the allowances have always had more in common with energy commodities than traditional financial instruments. The move, nevertheless, improved the carbon market’s liquidity and sent a stronger price signal to those covered by the system.
Carbon prices in Europe on a roller coaster ride
EUAs experienced a steep price increase, initially driven by its market reform, that later turned into a surge following the covid market turmoil in 2020. On March 18th, 2020, as lockdowns phased out across continental Europe, the price of one ton of CO2 tumbled to as low as €15. Since then, the price curve has only been trending upward. Reaching almost €100 in February 2022, a more than significant 554% increase compared to March 2020.
All market participants anticipated a carbon price of €100 by the end of the compliance cycle in April 2022. It took a war for the price to descend from highs to as low as €55 beginning March 2022. The Inflationary pressure from rising energy prices in the repercussions of the war created a demand-destruction paradox that may or may not prove correct in the long term.
The War in Ukraine and subsequent concerns over shortages had a knock-on effect on industries in Europe. Businesses fretted about the higher cost of inputs, supply chain disruptions, and consumers’ Incomes diminishing purchase power due to the high inflation rate of 8.1% in May.
Impact on the industry and energy production
Volatility continued to grip energy commodities and, by extension, carbon futures as the EU approved several sanctions against Russia. Gas has been red-hot as traders feared supply cuts from Russia in retaliation of European sanctions. The benchmark Dutch TTF gas contract reached an all-time high above €200/MWh in March, and German baseload power neared €500/MWh.
Companies covered by the EU ETS have struggled with these rapidly rising gas and electricity prices, especially in the Mediterranean countries of the EU, Romania and the Netherlands, where the excessive financial burden has taken some companies to bankruptcy or activity suspension. For businesses, it is a real challenge to decarbonize their processes in this economic environment, but just as with Darwin theory, those companies that can adapt the better to the new energy landscape are the ones that will move forward, but at least in the short term they will do it at the expense funnel down their costs increase to end consumers, exacerbating- even further- the cost of living.
The energy transition is not on hold
In some cases, business leaders are well ahead of politicians in term of the environmental ambition of their companies. At the beginning of May, in an open letter signed by 140 CEOs of some of Europe’s largest companies, the Commission was urged to meet the Green Deal targets and increase renewable energy capacity in Europe. The war has not delayed the achievement of these objectives. Rather, it served as a wake-up call for those responsible. Last year’s ‘Fit for 55’ package proposals would have reduced gas demand by 100 bcm.
Now, the REPowerEU proposal aims to reduce consumption by 155 bcm, which is equivalent to imports from Russia in 2021. Financing these plans is, of course, a challenge. Still, the European Commission has developed a detailed strategy which includes, for example, raising EUR 20 billion from auctioning allowances from the market stability reserve, and this must be done without disrupting the proper functioning of the carbon market.
What is coming next?
For the Fit for 55 proposals to become binding law, the EU Council and the Parliament (EP) should adopt the legislative proposal either in its original form or amended.
The European Parliament has largely deemed the Commission’s proposal to lack ambition and came up with counter proposals that aim to tighten the system further. In a surprise vote during June 8th plenary, the Conservatives, Social Democrats, and Greens reverted the EU ETS reform report by Peter Liese to the ENVI Committee. MEPs bout over the cap reduction and the pace of phasing out free allowances to industries. The rejected amendments have no legislative standing but offer a glimpse into different parties’ leaning in the EP.
The ENVI Committee had a procedural vote on June 14th, which ensured that the line-by-line amendment votes carried out during the last session would be voted on again in the next plenary session scheduled for June 22nd and 23rd. Negotiations between MEPs on the reforms will be informal until the ballot date.
Unlike the Parliament, the Council seems to side with the Commission’s initial proposals for the carbon market. France, the current holder of the EU rotating presidency, asked national governments to endorse key parameters of the EU ETS overhaul that the EU Commission proposed. It also requested environment ministers to agree on a common position at their meeting on June 28th. Similar calls emerged from other ten member states, including Germany, Spain and the Netherlands. The countries called the bloc nations against watering down the climate and energy plan.
The final shape of the system overhaul will be decided on in trialogue talks involving the European Council, Commission, and Parliament, most probably after the summer recess. The clock to cut the dependence on Russian fuels is ticking, with energy prices hitting the industry and consumers’ pockets.
The energy transition is not only necessary but -even more- urgent.

Water-saving will help on energy costs – get additional support from our experienced Advanced Services team

Reducing resource use and improving efficiency are key steps organisations will need to take to retain credibility on green steps they’re taking on their Scope 1, 2 and 3 emissions, to help lower impacts on the environment. 

Although water is under Scope 3 on your emissions, it shouldn’t be looked at last as it can help lower energy costs too. Getting more data on where water is used is an important first step.

Green Apple Environment Award winner Water Plus installed more than 400 data loggers on water meters in the space of six months in 2021 – providing further information on how it’s used across buildings.

Mark Taylor, Advanced Services Operations Manager in England for Water Plus, said: “With energy costs in the news, there are some areas where there are low-cost opportunities and options for organisations, particularly if the number of people at sites is fluctuating through a year. This is why tracking what water is used throughout a year is important.

“As there are carbon emissions linked to the water you get through taps, and the wastewater taken away and treated, it also shows that by just boiling the water you need in work kitchen kettles – to reducing water waste from any leaks, including dripping taps, running toilets from cisterns – and elsewhere at your site – soon adds up to lowering running costs, creating less carbon overall and using less energy too.”

Here’s where water-saving can make an impact:

  • In January 2022, a site had a 12 cubic metre an hour water leak but was not sure where on their pipes. They contacted Water Plus Advanced Services, who located the source of the issue and carried out the repair work. The leak, which data loggers on the water meter and the online portal also tracked, would have cost £22,000 in a month.

Work with organisations by Water Plus is also being recognised this year. The water retailer is shortlisted for Water Efficiency Project of the Year in the Water Industry Awards 2022 and was named a Finalist in the Environment Award at the Better Society Awards 2022.

To contact our team, please email – and include “FM Briefing” in the email subject heading. More tips to #BeWiseOnWater on the FM Forum website here – and at: .

Lithium batteries for emergency lighting: What you need to know

By René Joppi, Managing Director, Mackwell

Rechargeable lithium battery technology first emerged in commercial products in the early 1990s and has since grown in popularity. The development of lithium batteries was driven by the need for higher energy density, with portable electronic devices and electric vehicles being the main application areas.

However, lithium batteries are now also one of the preferred solutions for powering emergency lighting standby applications. Not only will this article uncover the many reasons behind why lithium batteries are popular when compared to alternative technologies, but it will also outline some of the considerations that must be made when specifying battery technology…

The Rise in Lithium Technology in Emergency Lighting

Lithium technology competes with the more established Nickel Cadmium (NiCd) and Nickel Metal Hydride (NiMH) technologies, and is often specified due to its potential for longer cycle life and increased energy efficiencies. This, in turn, allows for longer warranties to be offered. Furthermore, due to its lightweight and compact design, the technology is easily installed and can operate at high temperatures.

In today’s emergency lighting market, only one type of lithium chemistry – lithium iron phosphate (LiFePO4) – is recommended as opposed to lithium-cobalt and lithium-manganese systems more commonly used in portable electronics and electric vehicle applications. This is due to the ‘standby’ nature of emergency lighting applications, where the batteries are not regularly charged and discharged, instead operating in a state of ‘constant top-up’. LiFePO4 batteries are less prone to internal degradation of electrodes and electrode-electrolyte interfaces when used in this way compared to the other lithium chemistries.

Barriers to Safe Lithium Batteries

When handling emergency lighting batteries, safety must always remain front of mind.

Lithium is highly flammable in air and moisture, and great care must be taken when manufacturing and using lithium batteries – especially ensuring temperature limits are not exceeded to prevent fires. Lithium fires result from thermal runaway and are dangerous as they can be particularly difficult to extinguish. This is another reason why it is favoured to opt for LiFePO4 as it has a lower temperature rise in a thermal runaway situation compared to other lithium systems, making it inherently safer.

Instilling Robust Thermal Management

It is highly recommended to only use lithium technology in emergency lighting applications where there is a robust method of thermal management implemented, in particular, thermal monitoring of the battery case temperature through life. Where only a small number of suppliers of lithium battery systems for emergency lighting currently offer this, it is a safety measure not to be overlooked.

It must be noted that the extended lifecycles offered by lithium are still prone to be reduced by poor battery charge regimes and unintentional cycling of charge and discharge during the construction and installation phase. In this respect, lithium systems are no different to NiCd and NiMH. Therefore, choosing systems where the emergency driver has smart-charge and construction protection features is crucial to ensure that the benefits of choosing lithium can be fully realised. 

There is no doubt that the emergency lighting industry can benefit from the implementation of lithium battery technology due to its many benefits, such as long cycle life and increased energy density. This can often result in extended warranties being available, something that has traditionally not been offered for other emergency lighting battery systems.

Yet, lithium batteries do not come without their challenges. Great care must be taken when manufacturing and using lithium batteries within the industry, especially with respect to thermal management. Manufacturers need to adhere to safety compliance in the form of temperature monitoring circuits to ensure 100% safety!

Facilities managers looking to reap the benefits of lithium batteries without the safety concerns can look to specialised suppliers of lithium batteries and technology that offer thermal monitoring of the battery case.

Save Water, Save Energy – And how our experts can help you

By Water Plus

With the spotlight on energy costs and increasing focus on what organisations are doing to reduce impacts on the environment, there are small steps that can be taken now to help in the future.

Using less hot water through small steps like tap aerators in kitchens and facilities and cutting any areas of water waste helps. And using less water overall means lower Scope 3 emissions.

Tracking water use closer during a year allows those managing facilities to spot any issues early – including leaks that can be underground and not easy to spot. Data loggers, which can be attached to water meters, feed updates daily into a smart online portal to help manage multiple sites and spot opportunities for efficiencies.

Barry McGovaney, Sustainability lead at Water Plus, which is the UK’s largest water retailer and a Green Apple Environment Award winner, said: “Hot water can cost between 2 to 4 times more than cold water, once energy costs are considered, and water efficient taps, showerheads and other measures can all help there. It’s important to know what water you’re using, where and when, along with regularly checking site pipes, fittings and water meters, if they’re safe to access, ideally each month.”

Here’s the big impact data loggers, installed through the Water Plus Advanced Services team, have:

  • A manufacturing facility had a leak on one of their main site pipes, which had a fracture and was losing 21 cubic metres of water an hour – that’s 21,000 litres an hour. If this had not been identified, and quick action taken to organise a repair in December 2021, it would have cost around £10,000 a week – and £41,000 if it was running for a month. After contacting Water Plus, the Advanced Services team quickly pinpointed the leak’s location and made the repair.
  • A distribution centre was alerted to a leak that saw 10 cubic metres of water an hour seeping away underground – with a cost around £690 a day.

To contact our team, please email – and include “FM Briefing” in the subject heading.

More tips to #BeWiseOnWater at: .

COP26: Call made for renewable energy job creation

More than 130 renewable energy leaders, under the auspices of the International Renewable Energy Agency (IRENA) Coalition for Action, have launched a Call to Action for COP26, encouraging all governments at national, regional, and local levels to ensure access to high-quality, sustainable jobs during the energy transition.

Limiting the earth’s temperature rise to 1.5oC by 2050 requires a full decarbonisation of the energy sector. As such, the clean energy transition must progress rapidly. But to build a climate-resilient future, the energy transition must advance in a just and inclusive manner, leaving nobody behind.

As countries convene in Glasgow to re-align strategies and renew ambitions at the 26th United Nations Climate Change Conference (COP26), there is an opportunity to increase momentum of the global energy transition – and a transition grounded in renewable energy has been proven to generate widespread socio-economic benefits, including jobs.

“Leaving fossil fuels behind, we need to make sure that everybody can participate in a low-carbon economy. Policies are needed to make the best use of renewable energy players’ insights and best practices in driving a renewable energy market and creating adequate and equal opportunities for all,” says IRENA Director-General Francesco La Camera.

The Renewable Energy and Jobs: Annual Review 2021 report by the International Renewable Energy Agency (IRENA) finds that the renewable energy sector offered employment to 12 million people in 2020 – a steady increase since 2012 at 7.3 million. Renewable energy jobs are also more inclusive, showing better gender balance with 32 per cent women employed in the sector, compared to 22 per cent in the fossil fuels sector. These records provide a very promising insight into a clean energy future.

With the clock ticking, members of Coalition for Action urge governments to consider the following five recommended actions in their decision-making to accelerate a just and inclusive energy transition, at COP26 this week:

  • Comprehensive structural and just transition policies are critical to secure the benefits and manage labour market misalignments that result from the energy transition.
  • Concrete and resilient finance mechanisms are required for countries to equitably transition away from fossil fuels.
  • Job and enterprise creation in the renewable energy sector must be complemented with labour and socio-economic policies in the energy sector.
  • Long-term partnerships between industry, labour unions and governments are essential to ensure job security and social protection, especially in areas particularly impacted by the energy transition (e.g., coal mining regions).
  • Data-driven actions and solutions are needed to support targeted policies that encourage job creation, capacity building and reskilling to empower those disproportionately impacted, such as women, youth and minorities.

See a more detailed view of the IRENA Coalition for Action’s Call to Action for COP26.

Asset management and energy efficiency from Derwent FM

By Derwent fm

As has been highlighted during the pandemic, reducing energy usage across estates can result in significant financial savings and huge benefits to the environment. When buildings return to full occupancy, we must take the lessons learnt here into effectively managing assets to meet ongoing demand.

There are several ways and means we can action this. We need to start to utilise Building Management Systems (BMS) systems effectively to run assets efficiently in line with building occupation, turning off assets when not required or turning down usage when needed.

We can install sensor equipment so that lighting and ventilation systems only come on when activated. We can install more efficient heating systems which require less energy to run and can be remotely turned on and off.

We have proven we can run buildings more efficiently; we need to take the lessons learnt into the ‘new normal’ now.

Can you improve your CHP investment?

By Onsite Energy Projects

Have you invested in CHP in the last 3-4 years, or are you considering it ? If you haven’t yet, we may be able to provide a zero capex solution delivering significant savings.

If you have already invested, we may be able to help improve returns and reduce your business costs even more by helping you use all the power generated more efficiently.  Likewise if the performance or availability of the CHP has disappointed, we can assist with practical advice and review or renegotiate contract terms.

CCL costs on gas are set to rise by 90% by 2025.  So unless you qualify for an exemption (such as a  climate change agreement), you are going to see your returns eroded.  To those who are “power only” out there, it’s time to think out of the box and ensure you use the heat productively. We can help.

We specialise in making use of the waste heat from CHP or other busines processes.  Technologies to use heat productively now mean that in the right conditions we can use waste heat to produce as low as -40oC (to replace blast freezing, cold stores) or as high as 300oC (furnaces, cooking and frying), and pretty much everything in between, allowing us to reduce energy costs even further.

We can provide a free review of CHP performance, operating costs and options for improvement.

In the right circumstances, we could even purchase your existing CHP and provide discounted power back to you – so you still keep some of the savings and resilience benefits but also release cash for your core business in these challenging times.

This is the reason Onsite Energy Projects exists – we help businesses innovative, and implement the full potential of both energy efficiency and on-site generation measures.  We recognised the challenge of capex availability and can provide a no-capex, off-balance sheet solution.

If you would like to know more email us at or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required.

Don’t let COVID-19 wreck your climate change plans

By Onsite Energy Projects

We all need to refocus on the big issue of climate change, but we are facing a significant recession in the next few years. I predict that capex budgets are going to evaporate, and as a result investment plans are going to be put on hold. The consequence could be to derail our climate change and sustainability plans for some years to come.

At the same time, saving money has never been more important – to be competitive and grow jobs.  So how can you keep up the pace of sustainability gains, energy savings and make your business more competitive ?

Never has there been a better time to look at our zero capex, off-balance sheet solution.  We can help with energy savings ideas, sustainability innovation and develop the business cases for energy efficiency measures.  We can deliver them as an energy supply agreement without any cost to you.  All you need to do is pay for the power we provide (at a discount to what you are paying for grid power).

There is no cost to you for our analysis and recommendations.  We have experience in delivering solutions for complex manufacturing environments. We can particularly add value where you have a lot of use of heat, steam, chill or air conditioning.

In short we can accelerate your plans, not have them beaten back by lack of capital caused by COVID-19.

If you would like to know more email us at or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required.

Saving money on energy using Artificial Intelligence

Many use BMS (building management systems) to control your buildings. BMS is seen a “smart” in that it automates tasks that would need a human to do (such as changing set points, dead bands etc). Artificial Intelligence is best known for self-driving cars and playing chess against grand masters!! So does it have any role to play in managing our building better and saving money?

At OEP, we are already using artificial intelligence in two very real building and energy management applications and seeing £££ financial benefits:

(A) Energy Management. We can take in half-hourly meter data daily (no hardware needs to be installed), and identify patterns that could indicate a developing fault or anomaly, so it can be investigated before it becomes a cost, adjusting for weather and other inputs. The system self-learns and gets better over time at spotting new real issues. We oversee the results with our experienced energy management team, and interact with the customer.

An example benefit we picked up within 24 hours, was a (human) BMS programming error that would have cost £60,000 had it gone undetected, and probably would never have been picked up in the consumption on invoices.

In practice this also helps identify and monitor “behaviour” issues across an estate.  For example, we could highlight the differences in working practices between one supermarket and another in how they work with their refrigeration systems.

This is an ideal tool for multi-site operations (retail, restaurants, banks etc) with a rapid payback.  It allows over-loaded energy managers to have a proactive management tool, particularly across an estate of meters.  We can provide a THREE MONTH FREE TRIAL for businesses to find out if it works for them.

(B) We are also deploying AI to directly to manage the BMS, and even manufacturing processes. The software “learns” how the building or process reacts over time to different load events and climate conditions (creating a “digital twin”) and can develop its own strategies for how to optimise the building to (1) deliver the climate goals consistently and (2) at least energy cost.   It can even re-commission the building regularly.  Energy saving are typically 25%-40%.

The benefit of using AI is the ability for it to react quickly to changing circumstances, which other systems aren’t able to do. Other applications we are engaged on include compressed air management and refrigeration systems.

If you would like to know more email us at or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required.

Saving money using Artificial Intelligence

By OnSite Energy Projects

We are used to BMS (building management systems) to control buildings, and spreadsheets to analyse data. Both of these require human input (and are prone to human error). So does Artificial Intelligence have any role to play, and could it save money? Firstly, what is AI?

  • “Artificial Intelligence” (“AI”) is software “able to perform tasks normally requiring human intelligence, such as visual perception, decision-making, and translation between languages”.
  • “Machine Learning” (“ML”) is the “application of artificial intelligence that provides systems the ability to automatically learn and improve from experience without being explicitly programmed”

At OEP, we are already using AI / ML in two very real building and energy management applications and seeing £££ financial benefits:

  • Energy Management. We can ingest half-hourly meter data daily, and the software will identify patterns that could indicate a fault or anomaly, so it can be investigated before it becomes a cost. The ML learns from human past action (or inaction) on the issues raised to know if it should raise the issue again in future, or simply log it.

We provide “Energy Management as a Service” for less than £10 per meter per month, which provides over-loaded energy managers with a proactive management tool, particularly across an estate of meters.  An example benefit we picked up within 24 hours, was a (human) BMS programming error that would have cost £60,000 had it gone undetected.

We have plans to extend this to monitoring sub-meter data as well.

  • Automated BMS. AI/ML can also be deployed directly to manage the BMS.  The software “learns” how the building reacts over time to different events and climate conditions (creating a “digital twin”) and can develop its own strategies for how to optimise the building to (1) deliver the climate goals consistently and (2) at least energy cost.   It can even re-commission the building regularly.  Saving are typically 25%-40% of HVAC load – the impact of running the equipment at the right times and loads, and turning off when not needed.

The benefits of using AI is the ability for it to react quickly to changing circumstances. Other applications we are engaged on using AI are compressed air management and refrigeration systems.

If you would like to know more email us at or call on 0161 444 9989.

Onsite Energy Projects provides energy savings and energy generation solutions to energy intensive businesses, without capex if required.