CCm CBM0011

Written evidence submitted by CCm Technologies

Executive Summary

The Government should ensure net zero products and processes across the economy are incentivised over business-as-usual emission intensive practices. We welcome the EAC’s inquiry into CBAM as UK domestic efforts can be supported by an effective carbon border regime that prevents carbon leakages. 

The introduction of CBAMs across sectors would help level the playing field across the global economy by encouraging the adoption of best practice innovations in countries looking to export to the UK while increasing the scrutiny of supply chain emissions here in the UK. This scrutiny would serve to channel increasing amounts of net zero available investment into solutions that can support some of the hardest to address sectors.

CCm Technologies is confident it can talk from experience about the momentum underpinning emissions reduction partnerships.

CCm Technologies is an award-winning clean tech company which optimises resource use through Carbon Capture and Utilisation (CCU) solutions, including the production of net zero carbon fertilisers which allow a wide range of businesses to generate commercial value from captured carbon and other agricultural and industrial waste streams while also delivering improved sustainability.

Technologies like ours have a critical role to play in accelerating the decarbonisation of food systems by drawing together sectors that can benefit from circular economy waste solutions; facilitating emissions reduction; and providing the food sector with greater control over their agricultural environment.

Though CCm’s products are cost competitive with market alternatives and commercially viable without Government subsidy, there are policies the Government could introduce that can contribute to adoption at scale. These policy opportunities should be taken because of the immediate positive sustainability and environmental impact CCm products deliver.

1. What are the risks to the UK posed by carbon leakage? How effective is the Government’s current approach to tackling carbon leakage?
2. What role could a carbon border adjustment mechanism (CBAM) play in addressing carbon leakage and meeting the UK’s environmental objectives?

Please see answer to question 10.

3. Should the Government pursue a unilateral CBAM? If so, why and what form should this take? If not, are there alternative approaches to addressing carbon leakage which the Government should be considering?

The UK has businesses that offer emissions reduction solutions across product and supply chain life cycles. To accelerate the adoption of technologies and products, the UK’s trade environment should recognise the lower carbon lifecycle of UK products and discourage the import of higher embedded carbon products to ensure lower emissions products are the more economic choice.

Reduction of embedded carbon imports should form part of the UK’s trade strategy by the introduction of border carbon regulations.

4. If the Government were to introduce a CBAM, which products or sectors should be included and why?

CCm do not believe there is reason to exclude agriculture from a CBAM, provided a considered transitionary plan and coherent set of incentives is introduced to encourage farmers to adopt lower emissions practices.

Cost competitive fertilisers exist in the market today that can lower overall emissions and work with existing farming equipment.

By introducing incentives and a CBAM together, for instance by encouraging land managers to introduce carbon lock-in practices like the use of CCU fertiliser via new ELMS policy, while introducing a CBAM, this could boost the domestic market for UK products and create a competitive advantage that rewards farmers financially for adapting these practices.

5. What impact might a CBAM have on UK (i) industry, (ii) employment and (iii) consumers?

CBAMs would accelerate the adoption by industry of emissions reduction practices across supply chains, resulting in lower emissions products available as standard for consumers.

Already, the momentum in emissions reduction initiatives is encouraging businesses to proactively seek circular economy solutions to their waste and emissions issues. The Institutional Investor Group on Climate Change recently published a statement, supported by 53 of the largest institutional investors calling for “new baseline expectations for companies to produce ‘net zero transition plans’, ensuring director accountability and a link to AGM shareholder vote”.

This, coupled with recent Green Finance announcements made by the Treasury marks the start of a truly transformative environment for the UK, where investment and strategies shifting to lower emissions operations take place across sectors.

Complementing this with the introduction of a CBAM would be coherent with the above announcements and reflect UK leadership in emissions reporting and reduction.

6. What risks would need to be managed when designing and implementing a CBAM?
7. What wider opportunities and benefits might arise from introducing a CBAM?
8. How might a CBAM interact with the UK’s international obligations, including on trade and the environment?
9. Should the CBAM design include any special regard, e.g. for developing countries or small and medium-sized enterprises? If so, which circumstances should be given special regard, and what impact might this have? If not, why not?

CCm provides multiple carbon reduction and redistribution outcomes, delivering them through the circular economy into primary agricultural, food systems, water treatment and energy supply chains. This ensures that the carbon reduction benefits of our approach can be targeted at reducing Scope 3 Carbon emissions for multiple industrial sectors in both developed and developing economies around the world.

As is the policy in other countries, foreign aid could support the subsidisation of lower emissions products in developing nations where, unlike the UK, lower emissions products are not market competitive with state subsidised alternatives. This could be done by allowing the use of lower emissions products to qualify farmers for UK aid support.

The UK can improve the adoption of emissions reduction technology around the world by adopting a CBAM and coupling it with emissions reduction related aid where necessary.

10. What practical and administrative challenges might arise when designing and implementing a CBAM? How might these be addressed?

When designing a CBAM it’s important to accurately understand the different share of embedded emissions in the products arriving at the border.

It will be important to measure the greenhouse gases emitted across the whole life cycle of a product or service and identify how and when the different organisations involved can reduce their respective footprint.  Accurately identifying where emissions are generated can help assign responsibility and accountability to different parts of the supply chain.

Calculating Scope 3 Carbon emissions can be a complex challenge for any organisation.  Judgements need to be made to define the boundaries and the materiality of specific sources.  Some sources will be too small to consider, others will be hard to estimate. They are difficult to control and track because they very often lie outside of organisations’ operations. However, Scope 3 Carbon emissions could account for more than 50% of a company’s total GHG emissions (~80% in Microsoft according to their 2020 release).

Correctly identifying where emissions need to be addressed is critical to efficient and effective emissions reduction strategies and accurately measuring effects on competition.

Technologies that help address Scope 3 Carbon emissions need to be showcased and recognised because they have the most significant impact on the overall net zero plans of organisations who have meaningful scope 1 and 2 strategies but struggle with areas out of their operational control. Partnerships like those between the AD producers and CCm Technologies bring net zero closer to being realised and if more solutions are found to reduce the emissions of feeder products and services, a wide range of partner organisations benefit from a reduced emissions footprint.

Current agricultural processes produce around 10% of all UK greenhouse gases, and food production is responsible for one-quarter of the world’s greenhouse gas emissions (see fig. below). By using a CBAM to target the massive carbon footprints associated with conventional fertiliser production, technologies that can cut by this footprint by more than 90% will be channelled towards farming practices that need solutions. This will inevitably make a considerable contribution to the Scope 3 footprints of all companies in the food supply chain.

October 2021