What is a Rule?

The regulatory regime is very far from complete but it is expected to be a useful starting point. A rule for sustainability reporting in financial contracts, which are not counted as carbon-based EU taxonomy reporting tool, is under development.

To create a common terminology definition covering financial contracts, the taxonomy is not too different from the one used by guarantee legislation. However, for an emissions reduction contract, for example, there is a special legislation saying it is different from any other kind of contract of this type - it must not emit greenhouse gases into the atmosphere and be accredited to the EU's assemblage of greenhouse gases (EU taxonomy).

In order to gather a standard of assessment, an initial assessment of the item is done for the type of contract being assessed. After this initial assessment, further assessments can be done for each of the objectives on the list below. This list is to be used as guidance only; every EU company planning carbon-based contracts must carry out the full assessment, possibly turning this assessment into an EU regulation. First stage assessments must show that the greenhouse gas emissions are identifiable and the greenhouse gas flows can be actually estimated for each EU taxonomy reporting tool contract, and cannot rely on the dubious guidance of 'the best estimate' on assessing the amount of greenhouse gas.

For example, a HQE contract carried out by an engineering company may be assessed to have an output of 0.7 tonnes of greenhouse gas per hour. Firstly, the emissions would be reported in the technical area that they are likely to be identified, then would be reported for every Department of Climate Change expert on the company who could possibly contribute (if anyone is in a position to contribute with the knowledge and EU taxonomy reporting tool experience). Following the first stage, subsequent assessment outcomes show the EU carbon credits that this company achieved in this contract.

At the end of the assessment, the company has to account for its total greenhouse gas emissions for the first three years of its operation. Even though it is after the carbon credit period, the greenhouse gas emissions from the firm must increase at least 20% per year over any year period prior to the carbon credit period. The impact during the EU taxonomy reporting tool contract is the additional greenhouse gas emissions incurred by the firm, but, at the end of the contract, total greenhouse gas emissions from each firm will be reported on the EU allocation list, should the EU change its regulations on how it determines greenway commitments.

With the market now being set for the carbon credit period, and it may possibly be extended by a year, there remain serious doubts on how this will be implemented across the EU. In the meantime the European Carbon Trust is attempting to push through an initiative for the implementation of the EU regulation, with a view to charging energy companies for the ambition to comply with the requirement. But, new initiatives in experiments with CO2 reduction versus providing CE research funding will address the legal question in a new way: when the government must read the rules to comply with the EU taxonomy reporting tool regulation, if it is not unreasonable to make the cost of their implementation suitable to member households, what is the limit? Within two years the EU will have to announce a decision - and with this challenge, the future looks even more uncertain than before.

Taken together, these many analyses seem to suggest the difficulties of meeting the requirements, regulatory guidelines, agencies' to treat greenhouse gas emissions posed by companies under EU contracts as a significant environmental burden, and the availability of transport may prevent the full EU taxonomy reporting tool coordination necessary to drive the energy transformation under an organisation's green initiative.

One solution that might provide the answer are the next generation green procurement solutions, if procured in the right manner, with the green purchasing certification claimed on them as the key, to ensure they comply with the law, remain sustainable and in the long run save money for the EU and the UK in all efforts. A recent report by the Government's Direct Investment Development Department claims this to be a very ambitious market and yet there is evidence that many such solutions for the European market are on the drawing board. Particularly interesting will be the expected growth of the use of these EU taxonomy reporting tool solutions in domestic markets, UK or member alike, and not least to ensure that if the UK leaves the EU.

There are also possibilities that the Direct investment development department might also receive funding to fund these EU taxonomy reporting tool initiatives. This way, the Government Single Out, as well as allowing for the single market, would be the most cost-effective vehicle for a sector-wide energy cost control.

And, the critical and complex piece of the package will be to ensure that the already-eto meet the deadline set by the EU back in 2010-the European commission on climate change will complete their work on its own EU taxonomy reporting tool strategy and select a complete draft final recommendations for the regulation.