UK watchdog plans crackdown ‘greenwashed’ electricity tariffs

The energy minister has announced a review into how energy companies market their 'green' electricity tariffs, amid concerns that consumers may be misled by exaggerated claims about the environmental virtues of some energy plans.

The government said nine million British households already use 'green' tariffs and over half of all new electricity tariffs launched are now branded as “100 per cent renewable” or “green”.

Recent polling has demonstrated that almost two-thirds (62 per cent) of energy consumers are influenced by the green credentials of the available tariffs. However, 75 per cent believe suppliers have the responsibility to be more transparent about their tariffs.

“Transparency is key to bring consumers on the journey to net zero,” commented Richard Neudegg, head of regulation at uswitch.com. “Households want to do their bit to help the environment, so it’s vital to make it as simple as possible for them to confidently pick the tariffs that actually help to support renewable energy.

“More and more people are purchasing green tariffs, but it’s been difficult for billpayers to know exactly what’s under the hood of these deals. We support any measures that aim to demystify green tariffs for households.”

The review will investigate whether this current system is sufficiently transparent and whether the rules around what can be classed as a “green” tariff are fit for purpose. While renewable electricity generation has quadrupled in the past decade, some companies offer “green” tariffs based on fossil fuels. This is permitted as long as they purchase some renewable energy (i.e. 'Renewable Energy Guarantees of Origin' certificates) from other providers.

In the future, these certificates could be made more nuanced and suppliers could be forced to provide clearer information to customers about their green tariffs, such as the type of renewable energy used, where it was generated and when.

Anne-Marie Trevelyan, the minister for energy and clean growth, said: “Millions of UK households are choosing to make the green switch and more and more of our energy comes from renewables. I want people to know that when they sign up to a green tariff, they are investing in companies that make a conscious choice to invest in renewable energy.

“Part of that is ensuring companies are being as transparent as possible on where their power comes from. That way, every family in Britain can rest assured their choices are helping to contribute to our world-leading target of eliminating our contribution to climate change by 2050.”

As public opinion moves firmly behind the need for urgent climate action, some fossil fuel companies have been accused of greenwashing as they adjust to changing demands and restrictions. For instance, while 'blue hydrogen' projects from petroleum giants such as BP theoretically fit into the UK government’s plan for decarbonisation, a recent study demonstrated that blue hydrogen is more carbon-intensive than both coal and gas.

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