Cutting renewable energy subsidy schemes could slow sustainability progress, Dairy UK

By Ben Bouckley

- Last updated on GMT

The recession is limiting industrial access to energy subsidy schemes, according to Dairy UK
The recession is limiting industrial access to energy subsidy schemes, according to Dairy UK

Related tags: Renewable energy

Despite rapid progress towards sustainability goals, cuts to renewable energy subsidy schemes and multiple carbon taxes could slow the dairy industry down in terms of going “above and beyond” existing 2020 targets, according to Dairy UK.

We asked Dairy UK environment manager Richard Warren whether the UK government was doing enough to help the sector as a whole achieve Dairy Roadmap sustainability goals up to 2020.

Since 2008, dairy processors have increased energy efficiency by 1 per cent, lifted recycling rates by 5 per cent and increased recycled material use in packaging by 17 per cent, according to Dairy UK’s 2011 Environmental Benchmarking Report.

But referencing official subsidy schemes to encourage use of renewable sources of energy, Warren told Dairy Reporter.com: “They’re all very good, but within the current economic climate they’ve been cut back massively. And that is one thing that will, I think, limit the potential to go above and beyond some of the targets.”

The cost of compliance

Since dairy was an energy-intensive industry, Warren said a rising numbers of carbon taxes would eventually limit the amount of money that dairy processors could invest in energy efficient products.

He said: “It’s costing more and more money to comply with legislation and mechanisms, and particularly in a tough economic climate, there is a need for more subtle approaches to allow the development of industry-led initiatives.”

Warren citing the Climate Change Agreement or CCA (a government scheme that provides industry with a 65 per cent discount on the Climate Change Levy (CCL) in exchange for meeting challenging energy efficiency targets) as a good example of a successful voluntary, industry-led approach.

He said: “Yes, we have and will continue to commit to reducing our carbon footprint and energy use, but we need the flexibility to be able to do that.”

Within the UK, producers were subject to the CCL (a tax on all businesses), he added, and the CRC Energy Efficiency Scheme, effectively “a hugely complicated and expensive”​ cap-and-trade system, whereby you purchased allowances for energy used.

On top of that industry would be affected by a new phase of the EU-level Emissions Trading Scheme (ETS) in 2013, Warren said, when electricity generators would be charged for carbon emissions, which would push up energy bills massively.

In addition, the UK government planned to introduce the so-called Carbon Floor Price, Warren added, to charge generators a bottom level price (above EU levels) for emitting a tonne of carbon.

Although the floor price was meant to encourage investment in energy-efficient energy generation, many commentators thought the cost increase could also be passed onto consumers, he said.

Cutting carbon and water use

Overall, the two key sustainability challenges for dairy processors involved cutting both carbon and water use, Warren said. “The carbon one is obviously the big one, what everyone’s talking about.”

“What we aim for is not specifically carbon reduction in an absolute term, it’s the efficiency. So you can produce, say, a litre of milk with a smaller carbon footprint year-on-year going forward.”

Another carbon use issue related to waste and recycling, Warren said, and he added that industry had registered a “key headline success” ​in 2010, with all plastic UK milk containers now made from 10 per cent recycled material or recycled high-density polyethylene (rHDPE).

“We want to increase that to 30 per cent by 2015, and 50 per cent by 2020,”​ he said, adding that Dairy UK was also interested in overall carbon footprint savings by using less plastic.

‘Environmental footprint’ key

Said Warren: “One of the big things going on in the industry is light-weighting of bottles. It’s quite early on and it’s being trialed at the moment, but in simple terms it obviously means using less plastic for a bottle.”

But Warren said that ‘carbon footprint’ labeling on packaging wouldn’t give an accurate reflection of the “environmental footprint”​ of any given product.

He said: “You need to consider other things, like the nutrient density of the product, and if you consider that in conjunction with carbon footprint, then dairy does give environmentally friendly products. The amount of nutrients you get for your carbon footprint is quite a lot.”

On the consumer side, it was important to educate consumers to waste less and buy only the amounts they needed, Warren said, which had fed through into industry innovations such as smaller pack sizes for butter or single-pot yogurts.

Meanwhile, the dairy industry (including the likes of Arla, Robert Wiseman Dairies and Dairycrest) had worked with retailers and WRAP to support the use of ‘best before’ rather than ‘use by’ labeling, he added, which he said was particularly important for cheese.

He said: “Consumers might look at a best before date, and then chuck it away after that. But that product may be perfectly good to use. It’s things like that. If you cut down consumer waste, then through the supply chain that means less waste, less carbon footprint.”

Related topics: Sustainability, Markets

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