THIS RULING REPLACES THAT PUBLISHED ON 28 FEBRUARY 2018. THE WORDING OF THE ASSESSMENT HAS CHANGED BUT THE DECISION TO UPHOLD REMAINS.
A website for Good Energy, www.goodenergy.co.uk, seen in September 2017, stated on a page titled Our fuel mix: “At Good Energy, we believe the UK can be powered purely by renewables. We source all our electricity from renewable sources like solar power, wind power and hydroelectric power and biofuels. We always have done and we always will”. The text was positioned next to a graphic which displayed Good Energy’s fuel mix which it stated was 100% renewables, in comparison to the UK average fuel mix. The page continued with a description of Good Energy’s fuel mix.
The page went on to explain “Over the course of the year, energy suppliers must purchase sufficient electricity to feed into the national electricity grid to cover the amount their customers take out. At the end of each year, suppliers must disclose their fuel mix to the electricity and gas regulator, Ofgem. This information is published annually to help consumers make informed choices about their electricity supplier. At Good Energy, we ensure that all the electricity we sell to customers each year is matched 100% with electricity sourced from renewables”.
Text underneath the heading “Greenhouse Gas Emissions and nuclear waste” stated “An average unit of electricity in the UK (a kilowatt hour or kWh) results in 360g of carbon dioxide (CO2) emissions and 0.007g of radioactive waste. But the electricity we supply contains 0g of CO2 and no radioactive waste. This will never change”.
The complainant, who understood that Good Energy made use of biomass energy, which they understood produces more CO2 than coal when burnt, challenged whether the claim that the electricity supplied by Good Energy contained 0 g of CO2 was misleading.
Good Energy considered that consumers would understand the claim “the electricity we supply contains 0g of CO2” to mean that the net emissions of C02 from the generation was zero.
Good Energy said their fuel made use of biomass energy. They stated their Fuel Mix Disclosure Report confirmed all electricity that they generated came from renewable sources and provided a copy of their most recent (2016/17) Fuel Mix Disclosure Report. This report was submitted annually to Ofgem as required by the regulator. The report showed biomass energy made up 18% of their fuel mix.
In response to the assertion that energy produced from biomass supplied by Good Energy produced more CO2 than coal, they attached a report from the Department for Business, Energy and Industrial Strategy (BEIS) published in July 2010 that stated biomass fuels were considered a form of renewable energy. They further provided a fuel mix disclosure table compiled by BEIS which stated renewable energy sources produced 0 g/kWh of CO2 compared to coal which produced 925 g/kWh of CO2.
Good Energy understood the complainant’s assertion was that biomass fuels emitted more CO2 “when burnt”. They stated their claim that the electricity supplied by biomass fuels contained no CO2 followed the calculation methodology and results adopted by the government.
Good Energy further stated their approach to calculating CO2 emissions was consistent with the recommendations of the World Resources Institute (WRI), which they stated was the leading international authority on carbon accounting and reporting. They stated its greenhouse gas protocol (GHG protocol) guidance provided global standards for companies reporting their greenhouse gas emissions. The GHG protocol was recommended by the Department for Food and Rural affairs (Defra) as the best way to understand, quantify and manage greenhouse gas emissions. They therefore believed that the claim was in line with government guidance and the GHG Protocol and was the most appropriate way to present this information. They provided a copy of the GHG calculating tools which directed organisations to exclude emissions from the production and transportation of fuel. Good Energy noted that the GHG protocol was referred to in CAP Guidance for businesses that wished to make carbon neutral claims.
The ASA considered that in the context of the web page consumers would interpret the claim “contains 0g of C02” to mean that all of the energy that Good Energy bought and generated was from sources which did not produce any net CO2 over their full life cycle. We considered the claim therefore went further than the other statements on the ad that stated that they supplied energy from renewable sources only.
We considered that consumers would understand from the ad that Good Energy did not themselves produce all of their energy, and in the case of biomass they purchased it from suppliers. We noted that BEIS considered the types of energy that made up Good Energy’s fuel mix to be renewables and that they contained 0 g/kWh of carbon dioxide emissions. We understood biomass was classed for fuel mix disclosure purposes as carbon neutral on the basis that any CO2 emitted in its creation would be offset by reseeding and reforestation. This did not however take into account the CO2 emissions from other parts of the full life cycle of the process, such as production and transportation. We understood that although the level of carbon emitted would vary, in general over its full life cycle, biomass energy production was not carbon neutral.
The CAP Code required environmental claims to have been based on the full life cycle of the advertised product, unless the marketing communication stated otherwise, and must make clear the limits of the life cycle. We noted that Good Energy had followed the guidelines set out in Scope 2 of the World Resources GHG Protocol in calculating their CO2 emissions. Whilst we acknowledged that Scope 2 of the Protocol did allow for the exclusion of “indirect emissions” (such as those from transportation) from the calculation, we understood that Scope 2 was aimed at companies who wanted to report on the consumption of electricity purchased by them, i.e. to calculate their own company’s carbon footprint. The Protocol guidance stated that production and transportation emissions might instead be placed under the electricity generator’s inventory where they were likely to be classed as direct emissions. Whilst we acknowledged that Good Energy purchased energy produced from biomass rather than producing it themselves, we considered that consumers would consider the CO2 produced across the full life cycle of their entire fuel mix to be equally relevant to this claim. We therefore considered that the full life cycle of carbon emissions from all of the energy supplied by Good Energy should have been treated in the same way in regards to the CO2 claim.
Because Good Energy had not substantiated that all of the energy they supplied was from sources which did not produce any net CO2 over their full life cycle we concluded that the claim was misleading.
The ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation), 11.1 11.1 The basis of environmental claims must be clear. Unqualified claims could mislead if they omit significant information. and 11.4 11.4 Marketers must base environmental claims on the full life cycle of the advertised product, unless the marketing communication states otherwise, and must make clear the limits of the life cycle. If a general claim cannot be justified, a more limited claim about specific aspects of a product might be justifiable. Marketers must ensure claims that are based on only part of the advertised product's life cycle do not mislead consumers about the product's total environmental impact. (Environmental claims).
The ad must not appear again in its current form. We told Good Energy Ltd not to claim that the electricity they supplied contained 0 g of CO2 unless they held evidence that no net CO2 was emitted throughout the entire life cycle of the product or the ad made clear that the claim did not relate to the entire life cycle and made the limits of the life cycle clear.