Greenwashing on electricity tariffsWhat is Greenwashing and why should I care?

The government launched a consultation on 16 August to explore the extent of ‘greenwashing’ in the retail energy sector.

This comes amid concerns that energy suppliers could be overstating the environmental benefits of their green electricity tariffs and greenwashing right under our noses.

Over half of all new electricity tariffs are badged as ‘green’ or ‘100% renewable’ and 9mn households are now on green tariffs.

Currently, energy suppliers can market tariffs as ‘green’ if they have purchased enough Renewable Energy Guarantees of Origin (REGOs) to cover the electricity consumed by customers on that tariff.

What is greenwashing – Some critics state this is a form of ‘greenwashing’, as the electricity from the wholesale market will be a mixture of fossil fuels, low carbon, and renewable energy.

62% of customers say their purchasing decisions are influenced by how ‘eco-friendly’ a tariff is, but 75% think suppliers should be transparent and open about their tariffs, including how much of their renewable energy is purchased from other suppliers.

In the December 2020 Energy White Paper, the government committed to working with the industry to “ensure customers are provided with more transparent and accurate information on carbon content when they are choosing their energy services and products”.

This call for evidence, which closes on 6 December, marks its first step to understand the challenges in this area, and seeks views on:

> The extent to which annualised retrospective renewable energy matching under the current framework acts as a barrier to transparency.
> How the best framework could be adapted to enable a customer’s choice to drive additional investment in low carbon electricity generation.
> The types of interventions which may help to achieve greater transparency in the framework and avoid green washing.
> The role of other forms of low carbon power in future framework developments.
> Opportunities for innovation that can accommodate flexibility technologies in the future framework.

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Energy greenwashing UK cases have been identified by the Advertising Standards Authority and the Competition and Markets Authority, with several energy suppliers receiving rulings against misleading green claims in recent years. The CMA Green Claims Code, published in 2021, sets out what businesses — including energy suppliers — must be able to substantiate when making environmental claims.

When evaluating green energy tariffs, ask three questions to cut through potential energy greenwashing UK suppliers: what percentage of the electricity is matched with REGOs from UK-based renewable generation? Are the REGOs from the same year as the electricity consumed? Is the supplier a direct generator, a PPA buyer or simply a certificate purchaser? Genuine green tariffs will answer all three clearly — energy greenwashing tends to hide behind vague language about renewable investment without these specifics.

Catalyst Digital Energy provides independent advice on green energy procurement, helping UK businesses choose tariffs that represent genuine environmental value rather than energy greenwashing. To review your current green energy position, speak to one of our energy consultants today.