Energy & Carbon Dictionary
Our Energy & Carbon Dictionary has been created to break down some of the complex jargon and terminology used in the energy & carbon sector.
As such, we’ve curated a collection of frequently used abbreviations, expressions, and concepts, accompanied by concise explanations for better understanding.
Biodiversity describes the variety of life, including bacteria, plants and animals, that maintains nature’s delicate balance. A loss of biodiversity in a region can cause catastrophic decline of an ecosystem, including loss of life.
This is short for carbon dioxide (CO2) emissions. CO2 is one of several different greenhouse gases in the earth’s atmosphere that trap heat. As well as being released through natural processes, it is also released by humans burning fossil fuels for such as coal, oil and natural gas. Due to its abundance, CO2 is the main contributor to climate change. For that reason, the term “carbon emissions” is often used interchangeably with the term “greenhouse gas emissions.”
This is the amount of greenhouse gases emitted from the activities of a particular individual, organisation, or community. For example, a person’s carbon footprint would include the GHG emissions from the production of the food they eat and the products they buy, the transport and energy they use to travel and heat their homes.
For more information on finding the carbon footprint of a business, see ‘Scope 1-3 Emissions’
Like carbon offsetting, carbon insetting involves investing in carbon reduction or sequestration projects to compensate for emissions released. But whereas offsetting projects can take place anywhere, insetting must take place within your company’s value chain. For example, while traditional offsetting might involve choosing a renewables project to invest in, carbon insetting might involve setting up your own renewables project onsite. It offers businesses more control and oversight, and makes it easy to verify that a project is truly additional.
Carbon negative means removing more carbon than you emit each year, through natural carbon sinks (e.g. forests) or technologies such as carbon capture and storage. It goes one step further than “net zero”.
Corporate power purchase Becoming carbon neutral means reducing your carbon emissions as much as possible, and compensating for any remaining emissions by offsetting. It can cover a defined part of business operations, and typically accounts for just carbon dioxide (CO2). Net zero is similar but is used to describe all human-made greenhouse gas emissions (not just CO2).
Offsetting is where companies invest in external carbon reduction projects as a way of compensating for emissions that they have not yet removed. Projects include funding tree-planting schemes to create natural carbon sinks, or investing in clean energy infrastructure.
A corporate power purchase agreement, or CPPA, is a long-term contract under which a business agrees to buy some or all of its electricity directly from a renewable energy generator, such as a solar or wind farm (which is connected to the grid or a private wire connection). This differs from the traditional approach of simply buying electricity from licensed electricity suppliers. CPPAs help to finance renewable energy projects, as they give generators a guaranteed buyer and revenue stream for the energy they produce.
CSR refers to the policies and practices an organisation undertakes to make a positive impact on the world through their actions to society, the environment and economy. CSR and ESG are related, but there is a difference. ESG performance is assessed using set metrics, by investors and other stakeholders. CSR is a more qualitative, self-regulated approach that is not directly related to financial performance and business valuation. ESG is overtaking CSR as a method of reporting.
Refers to the steps that organisations or governments take to reduce their carbon emissions (or more widely, all greenhouse gas emissions, including carbon dioxide). For organisations, a decarbonisation plan should outline a pathway to reducing the emissions from your buildings, transport, industrial processes and so on. Typical measures for buildings include increasing energy efficiency and switching to renewable energy sources for heating, cooling and lighting.
ESG is a set of standards measuring a business’s impact on society, the environment, and how transparent and accountable it is. ESG frameworks are used by the majority of investors when screening a company for potential investment. ESG performance is commonly measured using both quantitative and qualitative indicators, e.g. greenhouse gas emissions, employee turnover rates, board diversity, executive compensation, community engagement, and so on.
Electric vehicles (EVs) are powered by electricity through charging points, which store the energy in rechargeable batteries. During operation they do not emit greenhouse gases, making EV a zero-emissions transport method. Although, it should be noted that an EV fleet is only as green as the power source charging the batteries. In the UK, a ban on the sale of petrol and diesel cars will come into force in 2035.
A GPA is a contract between two parties, one which produces green gas and one which is looking to purchase “green gas”, or biomethane. Biomethane can be created from a number of different feedstocks, including food waste, agricultural activities, domestic or industrial wastewater treatment, municipal solid waste and other feedstocks.
Organisations that produce biomethane gas, such as those in the agricultural industry, can export the gas directly to the grid. A third party company develops a tailored gas purchase contract, manages balancing services and deals with National Grid on their behalf. Organisations can also export directly to end users via a GPA.
Greenhouse gases are gases in the atmosphere that raise the surface temperature of planets such as the Earth. They include carbon dioxide (CO2), methane (CH4) and nitrous oxide (N20). These gases absorb and emit thermal energy, which is trapped for a period within the Earth’s atmosphere and turn warms the planet. Seven of these gases are increasing in concentration because of human activity – and scientists agree that this is the cause of climate change.
Greenwashing is the process of conveying a false impression or providing misleading information that suggests a company’s products or services are more environmentally sound than they are. Ways to improve credibility can include aligning with externally validated reporting frameworks, such as the Science Based Target Initiative (SBTi).
The Guarantees of Origin (GoOs) scheme provides transparency to consumers, in the EU, about the proportion of electricity that suppliers source from renewable electricity.
This scheme provides certificates called GoOs which demonstrate electricity has been generated from renewable sources.
The UK operates a similar scheme called Renewable Energy Guarantees of Origin (REGOs) which also demonstrate electricity where/when has been generated from renewable sources. However as of 1 January 2021, the EU no longer recognises UK REGOs.
Hydrogen fuel cell vehicles produce their electricity through a chemical reaction between hydrogen and oxygen in a fuel cell stack.
They are fuelled through a nozzle which delivers compressed hydrogen into the vehicle’s pressure tank, which takes about as long as filling up with petrol. If the hydrogen is produced using renewable electricity, it can be completely carbon free. Hydrogen vehicles also do more miles between refuels than EV can go between charges.
Hydrogen internal combustion engine vehicles differ from hydrogen fuel cell vehicles. They are essentially an adapted iteration of the conventional diesel/petrol powered internal combustion engine. Its carbon-free nature ensures the absence of CO2 emissions, thereby eliminating the primary greenhouse gas emission associated with traditional petroleum engines.
Net zero means no longer adding to the total amount of greenhouse gases in the atmosphere. Greenhouse gases include carbon dioxide (CO2) and methane. CO2 is released when oil, gas and coal are burned in homes, factories and to power transport. Methane is produced through farming and landfill. Not all emissions can be reduced to zero, so those that remain need to be matched by actively removing greenhouse gases from the atmosphere. This is known as “offsetting” and includes
natural methods such as planting trees and restoring peatlands, and industrial methods like carbon capture and storage.
A Renewable Energy Guarantee of Origin (REGO) certificate is issued for every megawatt hour of renewable electricity produced by a generator, such as a wind farm. They allow electricity suppliers to demonstrate to their customers how much of the electricity they supply was produced from renewable sources. The REGO scheme is not recognised in the EU.
The primary use of REGOs in Great Britain and Northern Ireland is for Fuel Mix Disclosure (FMD). FMD requires licensed electricity suppliers to disclose to potential and existing customers the mix of fuels (coal, gas, nuclear, renewable and other) used to generate the electricity supplied.
Scope greenhouse gas emissions are a way of categorising different kinds of emissions a company creates through its operations, either directly (scope 1) or indirectly (scope 2 and 3).
a. Scope 1: Direct emissions created by company facilities or vehicles, such as those from fossil fuelled transport fleet or natural gas used in boilers.
b. Scope 2: Indirect emissions created through the procurement of generation of energy/heat/steam from a provider.
c. Scope 3: Indirect emissions resulted from a business’ “value chain”. These can be from activities such as purchased goods, business travel, investments, leased assets AND anything not covered by scope 1 and 2. For help with Scope 3 emissions, visit our dedicated Scope 3 content hub.
SBTi is an internationally recognised, science-based framework that demonstrates to organisations how much/quickly they need to reduce greenhouse gases to prevent irreversible climate change.
Science-based targets provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals. Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to 1.5°C above pre-industrial levels.
More than 4,000 businesses around the world are currently working with the SBTi.
Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their needs. It is a very broad term, but can be divided into three core pillars: environmental, economic and social. Sustainable goals for a business should align with these pillars.
Over 1300 UK-registered large companies and financial institutions are required by law to carry out climate-related disclosures in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). We are used to thinking of climate reporting in terms of how the company affects the climate. TCFD flips the focus: it is all about how the climate affects (or could affect) the business.
NOTE: The International Sustainability Standards Board (ISSB) is taking over the monitoring of TCFD-aligned reporting in 2024. We will also soon hear more on the government’s proposed UK Sustainability Disclosure Standards (UK SDS) – which will build on TCFD reporting requirements. Get in touch for advice on these new requirements and how to prepare.
There are 17 United Nations Sustainable Development Goals (SDGs), including ‘Affordable and Clean Energy’ and ‘Clean Water and Sanitisation’. Together, they aim to be a “blueprint to achieve a better and more sustainable future for all” by 2030. Goal 13 focuses on Climate Action – with the aim of limiting global warming to 1.5C above pre-industrial levels.
The UN encourages companies to align themselves with the SDGs. A good first step is to assess the impact of your company against the seventeen SDGs, and identify related risks and opportunities across your entire value chain. Then hold a meeting of the board to set goals and targets specific to your company that align with sustainable development.
