BQ10 –Greenhouse Gas estimation and reporting tools for 2024 (CAW v18)

Specific Questions To Answer

The organisations in the water sector of UK and Ireland require common greenhouse gas (GHG) estimation and reporting tools that can be used for annual accounting (FY 2023-24) and to report against the Ofwat Operational Greenhouse Gas emissions common Performance Commitment during AMP8 (2025-30).

Each year, companies within the UK water industry are required to report on their GHG emissions to the industry Regulator. Companies also report on other aspects of their emissions to comply with other legalisation and regulations, such as the Streamline Energy and Carbon Reporting (SECR) and climate related disclosures to keep stakeholders informed on emissions and transition plans. The emissions data also contributes to the net zero work that the sector is undertaking and progress of individual company emissions reduction commitments, pledges and targets.

UKWIR has developed a standardised workbook for estimating operational GHG emissions, the Carbon Accounting Workbook (CAW), to bring consistency and accuracy to the emissions estimation methodology used across the industry.  The workbook has been in place for 16 versions (up to 2022) and is updated annually to reflect latest UK Government emissions factors, evolving best practice and recognised International Standards for greenhouse gas emissions accounting and to incorporate changes in industry practices as well as outputs from relevant water sector research projects. 

This GHG estimation and reporting tools for 2024 project in addition to providing an updated CAW v18 to be used for annual accounting (FY 2023-24), will develop a parallel but separate calculation tool to be used to enable relevant water companies’ reporting to Ofwat against the AMP8 common Performance Commitment for Operational Greenhouse Gas emissions. This is a new performance commitment and therefore does not yet have a finalised scope or agreed calculation but will need a common methodology and supporting tool to ensure undemanding and consistent reporting is possible. The final scope is due in April 2023.

Project Aims to Achieve

⦁    Provision of Carbon Accounting Workbook tool v18 that: 
⦁    supports estimation of annual greenhouse gas emissions for a water sector organisation, for the FY 2023-24,
⦁    covers all the sector specific emission sources,
⦁    enables consistent use of agreed estimation methodologies using the same emissions factors,
⦁    is transparent, facilitating easy interrogation of agreed estimation calculations and methodologies including how they are applied,
⦁    is reasonably accurate (and up to date) – with respect to the prevailing science, best practice guidance, UK government guidance and UK water sector operational practice,
⦁    will by default retain all core functionality provided by CAW v17 but seek to improve usability,
⦁    include additional or amended functionality to meet the water sector needs identified by the project steering group,
⦁    does not require purchase of non-standard office software,
⦁    is suitable for use (with annual refreshes) for 5 -7 years.

⦁    Provision of a Performance Commitment calculation tool to support performance reporting of the AMP8 common Performance Commitment for Operational Greenhouse Gas emissions. The tool should: 
⦁    match the finalised scope, requirements and guidance provided by Ofwat for the Operational Greenhouse Gas emissions Performance Commitment,
⦁    provide a facility to report baseline data (as required) from FY2023-24 data inputs and then be reused for subsequent years up to and including FY 2029-30,
⦁    be consistent with the methodologies and emissions factors as CAW v18 (where applicable),
⦁    be able to be populated either directly from the CAW or in a similar format to CAW v18 data inputs
⦁    facilitate easy interrogation of agreed estimation calculations and methodologies including how they are applied

Contractor Tasks

The key tasks for the contractor to achieve are the project deliverables set out below. We anticipate this will include activities such as:

1.    Uploads of the emission factors (EF) to reflect 2023 UK Government Conversion Factor values.
2.    Facilitate a review to agree core functionality of CAW v17 to be retained including reporting.
3.    Liaison with the Project Steering group to agree additional or amended functionality to meet the water sector needs including additional emission factors and estimating methodology.
4.    Engagement of regulators to build awareness and agreement that the performance commitment calculation tool meets their requirements.
5.    Incorporate outputs of other sector research activity for instance outputs of recommendations to process emission methodology
6.    Facilitate water company user testing of the tool