Government review launched to tackle greenwashed energy tariffs
The government is reviewing how energy retailers market ‘green’ electricity tariffs to consumers, in light of concerns that some products are not as environmentally friendly as they appear.
Switching to a clean energy supply is one of the most important steps a business can take to meet carbon reduction and net zero goals; and many are signing up to energy tariffs that are badged as ‘100% renewable’ or ‘green’.
Energy companies are able to market tariffs as ‘green’ even if some of the energy they supply to customers comes from fossil fuels, as long as this is offset by purchasing enough certificates called Renewable Energy Guarantees of Origin (REGOs) to cover their customer base. These determine the proportion of electricity that they source from renewable electricity generation.
With the UK having more than quadrupled its renewable electricity generation since 2010, the government wants to ensure energy users signing up to a green tariff know their energy is coming from green sources of electricity generation.
The review will explore the extent of ‘greenwashing’ in the retail energy sector, whether the current system is suitably transparent and whether the rules around what can be called a ‘green’ tariff remain fit for purpose.
Options being explored include looking at whether the system around these certificates needs to be smarter, as well as whether suppliers need to provide clearer information to households about their green tariffs, including type of renewable energy used (such as wind or solar), where the renewable power was generated and when.
The call for evidence on designing a framework for transparency of carbon content in energy products is open until 6th December 2021.