Ecolabels and what they bring to the renewable energy market

Ecolabels increase environmental awareness

From time to time, we hear people commenting that energy consumers are confused and that the existence of “a multitude of ecolabels” contributes to that confusion. We agree that the energy market can be confusing, but it’s not for this reason at all. In this article we’d like to shed light on this topic and explain what purpose ecolabels serve, why product names shouldn’t be mistaken as ecolabels and how public institutions and civil society can help empower energy consumers.

1) Are there many ecolabels for renewable energy?

Let’s not mix ecolabels for different sectors

Before reaching a conclusion about the number of ecolabels, we should first make sure which sector(s) each ecolabel covers. When talking about renewable energy sales, for example, including all other ecolabels that operate within different sectors only creates confusion! Ecolabels for green buildings, fair trade, sustainable tourism, carbon accounting or other sectors are often mistakenly put into one pile. This creates a false impression that there are too many ecolabels to choose from. This common mistake is easy to avoid, with a simple bit of research being all it takes to find out the answer. Fortunately, we have already done the research for you and can give you the answer upfront: There are, in fact, only a few ecolabels that work in the area of renewable energy. In this article we’ll clarify this further, so please read on!

Geographical availability is key

The next point to take into account is geographical availability. National ecolabels don’t offer any possibilities outside their country. Putting local ecolabels from different countries together as possible options only creates confusion. The second reason for confusion is also easy to solve with a quick check to see where the ecolabel operates. Do they offer information available in different languages? Are their criteria applicable to different regions and available in different languages? Are they open to cooperate with local stakeholders? 

In Switzerland for example, there is a local ecolabel called NatureMade, in Sweden the local ecolabel is Bra Miljöval and in Austria they have one called Umweltzeichen. These ecolabels all have a geographical territory, thus not relevant outside these countries.

Having numerous ecolabels, Germany so far is the only exception. Germany’s annual electricity consumption is over 500 TWh, with the country having over 1000 energy companies, very active environmental NGOs and numerous research institutes. The number of ecolabels reflects the size and the dynamics of the German market. The labels on the German market include TÜV Süd’s EE labels, OK Power, Grüner Strom and several others.

Self-declarations and for-profit labels by energy companies

It is also important to distinguish between ecolabels and self-declaration products sold by energy companies. These names may sound like ecolabels, but they are simply energy products named differently by their sellers. That’s why this is the category of “labels” where we see the large numbers. But these aren’t labels, just names! And with the same ease of naming a product you are selling, it’s equally as easy to name such self-declaration products with fancy names and for them to act as ecolabels – as we find almost as many cases of this as there are energy companies.

We recommend distinguishing non-profit ecolabels, such as the (very few) ecolabels managed by environmental NGOs and those that are owned and managed by private companies.

There are also self-declarations by companies that consume renewable energy, made to look like external ecolabels. Even though we appreciate their choice of using renewables and them taking the initiative to communicate about it, making a self-declaration look like an external, third party supported claim is simply not accurate.

The so-called “Type I ecolabels” cover multiple attributes and are verified by a third party. On the retail energy market, EKOenergy is the only label that fulfils all of that which we have mentioned above, whilst at the same time having the widest geographical availability.

2) What role do the ecolabels play?

There are only a handful of third-party, nonprofit ecolabels, with their aim all being the same: to help consumers get more out of their energy contracts. 

Active involvement from consumers is part of the energy transition. There are a multitude of actors in the energy market with different budgets, expectations, capacity and needs. Some consumers are happy with green tariffs, others want to get their energy from a specific power plant, others want to invest in their own installations and become prosumers, etc. Ecolabels fit well in this landscape of different demands.

There’s not one big solution to end the fight against climate change, but lots of small steps to be taken. That’s why we developed the EKOenergy label in a way that it can be combined with any method of renewable energy sourcing, used by large corporates as well as small households. An endorsement by a non-profit expert organisation makes it easier for consumers, both large and small, to take action. Ecolabelled renewable energy fulfils certain criteria and has other benefits, so it becomes easy for the consumer to have a full package by going for ecolabelled energy instead of gathering all the information by themselves.

In this regard, having different labels that stress different aspects and reach different target groups is a good thing for the market. Sophistication and diversification of demand is only one aspect of a growing market after all, so why not have different guidance for making better choices?

3) How to empower consumers instead of confusing them?

We invite all those that worry about confusion to lead by example. Long reports listing and/or comparing ecolabels aren’t generally helpful for consumers and finding relevant information isn’t easy when ecolabels, operational in different areas, are listed together. Most ecolabels are not applicable under different circumstances and geographical areas, and the more details listed, the more overwhelming those long reports get. Instead, taking action by choosing ecolabelled energy and supporting solutions that have the widest geographical reach would have stronger impact. Theoretical discussions about the topic also confuse many, instead of bringing clarity. Actions speak louder than words!

Companies joining the RE100 and switching to 100% renewable energy are inspiring many others. There are also those who don’t only switch to renewable energy, but take an extra step by choosing EKOenergy-labelled energy. In addition to buying 100% renewable and sustainable energy, these companies are also contributing to the new clean energy projects we finance in developing countries, as well as supporting us as an environmental NGO in our communication campaigns and advocacy work for renewables in many countries.

EKOenergy-labelled renewables are available in the EU and beyond

We hope that public authorities follow their example, including the European Commission. Is there a need to develop an EU-wide green energy label using taxpayers’ money, while it already exists? EKOenergy is available in the EU and beyond. We warmly encourage all EU institutions to start using 100% EKOenergy-labelled energy everywhere they are located.

Empowering energy consumers means raising awareness about renewable energy production and about how consumers’ choices shape the market. Supporting the work done by the existing ecolabels, sharing information about their work and even mentioning them on social media can go a long way!

Unrealistic plans to create overarching labels or unifying national ecolabels to limit the options available in the market would create unfruitful, long discussions which would only delay climate action further, as opposed to empowering consumers. We are happy to share our expertise in the market with any interested stakeholder, and as always, we welcome any support in increasing our visibility to broaden our reach even further.

Published on 29 July 2020