Background
Summary of council decision:
Two issues were investigated, both of which were Not upheld.
Ad description
The website for Haven Power www.havenpower.com, an electricity supplier to businesses, seen in June 2019, included a “Why us” page which, under the heading “Innovating for a sustainable future”, stated “Being part of Drax Group means you can have confidence in our energy supply, as well as our commitment to sustainability. The majority of the electricity we supply comes from Drax – generated with responsibly-sourced, compressed wood pellets, it produces 86% less carbon than coal-generated energy”.
A link underneath titled “Read more” clicked through to an “About us” page. The page included the sub-heading “Our ambition is to become carbon negative by 2030” underneath which text stated “Being carbon negative means that we will be removing more carbon dioxide from the atmosphere than we produce, throughout our operations – creating a negative carbon footprint for the company”. Under the sub-heading “Our core activities” further sub-heading stated “Pellet production”, “Power generation” and “B2B Energy supply”.
Issue
Biofuelwatch challenged whether the claims:
1. “generated with responsibly-sourced, compressed wood pellets” was misleading and could be substantiated; and
2. “it produces 86% less carbon than coal-generated energy” was misleading because the calculation methodology was disputed by some within the scientific community.
Response
1. Haven Power Ltd said the Renewable Obligation Order (2015) (ROO) provided a definition of sustainably sourced biomass with which they complied. They said they had to demonstrate to UK regulators that they did not source from highly biodiverse land, high carbon stock land or land that was peat land. Haven Power provided information related to Renewable Obligation Certificates (ROCs), which they said were issued to operators of accredited renewable generating stations for the eligible renewable energy they generated. They said energy suppliers such as Haven Power used ROCs to demonstrate their renewable energy obligations set out in the ROO. They said that the Drax biomass power plant had been issued with ROCs for the energy they produced and provided information about the ROCs they procured for the most recent compliance period. They said they adhered to the UK Government criteria for sustainable biomass. Haven Power said the principles in that criteria were reflected in the sustainability requirements for woody biomass in the ROO, which stated that woody biomass was obtained from a sustainable source if it was grown within an area of forest or other land which was managed in a way that was consistent with the Forest Europe Sustainable Forest Management criteria.
Haven Power said that in order to be eligible for the subsidies they received for generating biomass electricity in the UK, they had to evidence that they met the full sustainability requirements, which included limits on supply chain emissions and the sustainable forest management requirements. Compliance against these requirements was assessed annually through a third-party audit. Haven Power said that their parent company Drax had developed a rigorous process which ensured that new and existing biomass suppliers they used had to demonstrate that all sustainability and legal requirements were being met. Their eight key stages for ensuring compliance were: chain of custody; supplier audits; EU Timber Regulation legality assessment; greenhouse gas life cycle assessment and monitoring; the sustainability data return (SDR) captured in the contract; the SDR and annual declaration; regional and country risk assessments; and supplier relationship management and monitoring. Haven Power said the alternative process was for suppliers to evidence the necessary sustainability requirements through Sustainable Biomass Program (SBP) certification. They said SBP-compliant material had been benchmarked by Ofgem to fully meet the UK sustainability requirements.
Haven Power said that if a supplier could provide all their biomass to Drax with an SBP compliant biomass claim, Drax did not require an audit to be carried out. Haven Power said the Drax Power Station held chain of custody certification under three schemes: the Forest Stewardship Council (FSC); the Programme for the Endorsement of Forest Certification (PEFC); and the Sustainable Biomass Program. They said the chain of custody certification was used as a mechanism for tracking wood fibre from the forest to the final product and destination. Haven Power said that each supplier in the chain had to have a documented system so that wood fibre could be identified and traced. They said Drax required that all its suppliers achieved chain of custody certification, either through FSC or PEFC, before contracts were signed and pellets were delivered. Haven Power said that in addition to the Drax internal process and SBP certification, sustainability could further be demonstrated through Forest Management (FM) certification. That confirmed forest was managed in a way that preserved the natural ecosystem and benefited the lives of local people and workers, while it ensured economic viability was sustained. They said FM certification was difficult to achieve for some types of forest owners (for example where the owner only had a small area of land and FM certification was not economically possible), so an alternative level of assessment called Controlled Wood was available. That ensured that wood fibre was not: illegally harvested; harvested in violation of traditional and human rights; harvested in forests in which high conservation values are threatened by management activities; harvested in forests being converted to plantations or non-forest use; or from forests in which genetically modified trees were planted. Haven Power said that Ofgem guidance showed that FSC, PEFC and SBP all met the definition of sustainability under UK legislation.
2. Haven Power said the claim was based on the UK Government’s methodology. They said the combustion of biomass had long been considered low carbon because the carbon dioxide released was previously captured by the plants being combusted when they grew. The carbon was then reported on national inventories when the plants were harvested rather than when they were combusted. Haven Power said that was a central tenet of global carbon accounting and that various bodies agreed the use of biomass for power generation could be low carbon: the International Energy Agency; the EU Emissions Trading System; the Committee on Climate Change; and Ofgem.
Haven Power did not believe the claim “it produces 86% less carbon than coal-generated energy” would be understood to mean that biomass produced 86% less carbon than coal at the point it was burned to generate energy. That was because the wording of the ad referred with equal prominence to the sourcing of biomass and because there was no reference to power stations, or burning fuel to generate energy. They also believed the reference to Drax indicated where the electricity was supplied from originally. Haven Power believed the ad would therefore be understood to mean that biomass produced 86% less carbon across its life cycle. Haven Power said the ad referred to a ‘Read More’ link, which directed users to further information about their carbon initiatives and which they said placed in greater detail the basis of the claim. For example, it stated “Throughout our operations” and included information on the full lifecycle of biomass production, power generation and electricity supply.
Haven Power said that the website was directed solely at business users and that the vast majority of their customers transacted through third-party intermediaries, energy managers or energy brokers, who were experts and who would advise and procure energy supply contracts on their behalf. They said their remaining customers were large businesses that employed expert energy analysts and who would purchase energy from them directly. They therefore believed the ad’s audience was business users who would have an existing understanding of how biomass energy generation’s carbon impact was measured. Therefore, the audience would understand the claim “it produces 86% less carbon than coal-generated energy” was based on the entire lifecycle of the biomass.
Assessment
1. Not upheld
In the context of the heading “Innovating for a sustainable future” and the preceding sentence “Being part of Drax Group means you can have confidence in our energy supply, as well as our commitment to sustainability”, the ASA considered the claim “The majority of the electricity we supply comes from Drax – generated with responsibly-sourced, compressed wood pellets” would be interpreted as an indication that the majority of the electricity supplied by Haven Power was produced by Drax, and that this electricity was produced from wood pellets which were sourced in a sustainable way.
We considered that advertisers should take particular care not to mislead when making absolute ‘green’ claims such as ‘sustainable’ which did not have one defined meaning, and in addition should base environmental claims on the full life cycle of the advertised product, unless the marketing communication stated otherwise.
In this case, however we considered that the ROO laid out sustainability requirements around the use of biomass as a source of renewable energy, and therefore assessed whether the evidence provided by Haven Power demonstrated that they met those requirements. We understood the ROO included sustainability criteria which consisted of land and greenhouse gas emission criteria. The former focused on the land from which biomass was sourced, while the latter accounted for the life cycle of greenhouse gas emissions of the biomass. We understood an energy producer which operated a Renewable Obligation Order accredited generating station had to report monthly information to Ofgem in order that they would be eligible for ROCs. That included providing information which confirmed the biomass they sourced to generate electricity met the sustainability criteria set out in legislation. ROCs were certificates issued to energy producers to demonstrate energy had come from a renewable source. We understood Drax was issued ROCs for the energy they generated from biomass. Once issued, we understood ROCs were sold by energy producers to energy suppliers such as Haven Power. Because of the sustainability criteria requirements of the Renewable Obligation Order, which had to be reported for ROCs to be issued, we considered that was also sufficient to demonstrate that the energy supplied was sourced sustainably. Haven Power provided us with information showing the ROCs they had purchased for the most recent reporting period, which corresponded to the electricity they had supplied. Because we considered Haven Power had demonstrated they had met the sustainability requirements set out in the Renewable Obligation Order, we concluded the claim “generated with responsibly-sourced, compressed wood pellets” was not misleading.
On that point, we investigated the ad under 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), 11.3 11.3 Absolute claims must be supported by a high level of substantiation. Comparative claims such as "greener" or "friendlier" can be justified, for example, if the advertised product provides a total environmental benefit over that of the marketer's previous product or competitor products and the basis of the comparison is clear. 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), but did not find it in breach.
2. Not upheld
We understood Biofuelwatch’s challenge to the claim “it produces 86% less carbon than coal-generated energy” was based on concerns regarding the methodology which underpinned it. Specifically that, energy produced from the burning of biomass did not take into account its full environmental impact because only certain carbon emissions over the course of its life cycle were accounted for. However, we understood that this was consistent with the UK’s existing methodology for accounting for carbon emissions in the energy sector and we therefore considered it was legitimate for the claim to be made on that basis. We also understood that those who engaged with the ad were likely to be business users, either energy managers, specialist energy brokers or energy analysts. We therefore considered that much of its audience would have a specialist knowledge of the energy sector and were likely to understand the methodology which underpinned the claim. Because we understood that the claim aligned the established methodology and because the audience was likely to understand that the claim “it produces 86% less carbon than coal-generated energy” was based on that methodology, we considered it was unlikely to mislead.
We investigated the ad under CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 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), but did not find it in breach.
Action
No further action required.
