ENVIRONMENT: AS UK AND US retail chains commit to cutting their carbon footprints, their Irish suppliers are coming under increased pressure to curb their own carbon dioxide emissions. Where creating such emissions is unavoidable, companies can buy carbon credits to offset the effect. Now a new Irish online carbon-exchange platform is making doing so more affordable and accessible.
Increasingly corporate giants are putting the squeeze on their suppliers to help them to achieve more environmentally friendly operations. Under Marks Spencer’s Plan A manifesto, the retailer has pledged to make its UK and Irish operations carbon neutral by next year. To achieve this, the company needs to reduce emissions across its supply chain so it is putting pressure on suppliers to cut their carbon footprints.
Marks Spencer intends that by 2015 a quarter of the food sold in its stores will be supplied by factories that have reached social and environmental standards set by the retailer.
Similarly Wal-Mart, which owns the Asda chain in the UK, has enlisted the help of its suppliers in its bid to reduce its greenhouse gas emissions by 20 million tons by the end of 2015, as it estimates that more than 90 per cent of its emissions come from its supply chain.
These types of initiatives have acted as a wake-up call for many Irish companies, particularly those in the agri-sector that export to the UK and US, according to Niall McManus, founder of Kilkenny firm Cosain, which has just launched the an Irish carbon-trading platform in partnership with Australian company Carbon Trade Exchange (CTX).
“This is coming down the line. You have to be prepared for it,” McManus says.
Until now, the availability of credits generated by Irish emission-reduction projects has been limited, with only a narrow range of credits sold over the counter (OTC). According to McManus, OTC credits are often sold through brokers and so transaction fees and mark-ups apply. The Cosain platform allows businesses to go online and choose from a broad range of carbon credits generated from projects in Ireland and internationally. They are classified by price, project type and year of generation.
The Irish carbon trading platform provides reassurance to prospective buyers by enabling them to access all the validation and verification data relating to the creation of the carbon credits. Cosain’s Irish-generated carbon credits are recognised by the Markit Environmental Registry, which has the largest voluntary carbon registry in the world.
According to CTX founder Wayne Sharpe, companies that buy carbon credits invariably increase their focus on reducing emissions, which leads to a direct saving that exceed the original cost of offsetting their emissions.
The new exchange is also expected to bring wider economic benefits by stimulating employment growth in the green sector, in carbon-credit validation and carbon-reduction projects.
One of the most positive aspects of the exchange is that it creates a fresh source of funding for emission-reduction and renewable energy projects.
A number of local carbon reduction projects are already up and running. Country Crest in north Co Dublin, which is one of the biggest suppliers of potatoes and onions to retailers, installed a wind turbine in 2009. Last year it approached Cosain about generating and trading carbon credits and the company has since succeeded in getting its credits validated.
Not only has Country Crest avoided a total of 1,263 tons of carbon emissions in 2009 and 2010 by installing the turbine, it has also generated 1,263 tons of carbon credits that will be listed on the Markit Environmental Registry and then will be made available for trading on the Cosain platform.
A number of community-led projects could benefit from this new revenue stream too. The community of Ballina has achieved a 30 per cent reduction in energy and water use, as well as waste going to landfill, through a three-year programme with the University of Limerick.
The results of the programme will now be validated with a view to generating carbon credits to trade on Cosain.
Cashel’s Family Resource Centre is hoping to emulate Ballina’s success by adopting the university’s emission-reduction programme.
McManus says that credits generated through Irish projects are likely to have more than just domestic appeal, and anticipates demand from businesses internationally.
Despite its problems, he says Ireland retains a “green brand” image because of its landscape and the low level of industrialisation, which provides credibility to Irish projects.
Another factor in its favour is the Irish diaspora at senior levels within multinationals who want to support Ireland while being assured that the carbon credits are high quality.
So what about Irish individuals who want to offset a long-haul flight or their car emissions? Can they use the exchange to cut their personal carbon footprint? Cosain intends to offer a retail solution for smaller purchases below 100 tons. This option is already being offered in Australia and will soon be available to Irish customers who wish to reduce their impact on the environment.
