The UK Government has announced a review of how energy retailers advertise ‘green’ electricity tariffs amid concerns of ‘greenwashing’.

With more than nine million homes across Britain using green tariffs, warnings have been issued that some energy firms could be overstating how environmentally-friendly their products and services are.

Launched today, the review will examine the extent of ‘greenwashing’ in the retail energy sector, according to Energy Minister Anne-Marie Trevelyan.

In particular, it will explore whether the sector is “suitably transparent” for consumers and whether the definition of ‘green tariffs’ should be changed to reflect the energy sources firms rely on.

Long-term, Trevelyan revealed the government hopes to ensure that consumers are signing up to a tariff on the basis that they know their energy comes from fully green sources.

She said: “Millions of UK households are choosing to make the green switch and more and more of our energy comes from renewables.

“But I want people to know that when they sign up to a green tariff, they are investing in companies that make a conscious choice to invest in renewable energy.

“Part of that is ensuring companies are being as transparent as possible on where their power comes from.”

Tackling energy tariff ‘greenwashing’

At present, energy companies can market tariffs as ‘green’, even if some of the energy they supply comes from fossil fuels – providing this is offset by purchasing certificates called the Renewable Energy Guarantees of Origin.

These certificates disclose the proportion of electric that firms source from renewable electricity generation.

As part of the review, the government aims to explore whether the current certificate system could be improved.

New rules could also be introduced which force companies to provide consumers with clearer, more concise information on energy sources, including the type of energy used and where it was generated.

Nearly two-thirds of UK energy consumers say their decisions are influenced by how eco-friendly an energy tariff is, according to research published this year.

However, 75% believe suppliers should be more open and transparent about their tariffs, including how much of their renewable energy they buy from other companies.

Richard Neudegg , Head of Regulation at Uswitch, insisted that transparency will be key to encouraging more households to embrace green energy sources.

He said: “Households want to do their bit to help the environment, so it’s vital to make it as simple as possible for them to confidently pick the tariffs that actually help to support renewable energy.

“More and more people are purchasing green tariffs, but it’s been difficult for bill-payers to know exactly what’s under the hood of these deals. We support any measures that aim to demystify green tariffs for households.”

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Sue Davies, Head of Consumer Protection Policy at Which?, welcomed the review announcement as a positive step for consumers.

She commented: “We know that consumers want to make more sustainable choices, so it’s good that the government is investigating concerns that some suppliers appear to be ‘greenwashing’ their energy tariffs, which could risk misleading customers.

“We believe there needs to be greater clarity on how renewable electricity is defined and marketed.”

The government revealed it will publish a separate call for evidence from third-party intermediaries in the retail energy sector, including price comparison sites and auto-switching services.

Currently, these organisations operate outside of retail market regulations despite nearly half of all UK households using these services. The separate review will seek views on whether a new regulatory framework is required to include these providers.