December 7, 2009 3:28 pm
Under a UK government scheme, due to start in April 2010, thousands of organisations will have to buy CO2 allowances to cover their carbon emissions.
Do you know how this will affect your business?
The CRC Energy Efficiency Scheme is a new mandatory emissions trading scheme that aims to improve energy efficiency and reduce the amount of carbon dioxide emitted in the UK. It is central to the UK government’s strategy to achieve carbon emission reductions of 80% by 2050 (compared to 1990) and aims to reduce emissions through energy efficiency rather than renewable energy or offsetting. Participants will need to report on and buy allowances for their CO2 emissions for all energy used on site.
In the introductory phase allowances will be priced at £12/tCO2. In later phases allowances will be sold at auction at the market rate. These funds will be recycled to particpants depending on their relative performance in reducing their emissions. Good performers will receive a rebate greater than the cost of their allowances, and vice versa for under performers.
Will you be affected?
Encouraging energy efficiency by emissions trading is increasingly being pushed down to smaller individual emitters. The EU Emissions Trading Scheme (ETS) was introduced in 2005 and targets emissions from utilities and large industrials; the CRC Energy Efficiency Scheme will come into force in April 2010 and introduces carbon reduction targets to other large organisations in the public and private sector. It is likely to affect approximately 20,000 organisations. Is your business one of them?
Information packs will be sent out by November 2009, based on 2008 electricity consumption. Any organisation will have to register as a full participant in the CRC Energy Efficiency Scheme if:
Those exceeding the threshold will have to monitor, report and buy allowances for their CO2 emissions from all fuels used on site each year. Those that don’t still have to register for the scheme and show they don’t qualify in an ‘information disclosure’.
Sectors most likely to be impacted include supermarkets, retail chains, hotel and restaurant chains, large offices, small to medium industrial facilities and almost all public sector organisations.
How can we help?
Early action now will ensure you are in the best possible position to manage your performance in the scheme once it starts. Taking measures such as installing Automatic Meter Reading (AMR) and becoming accredited by the Carbon Trust Standard will ensure you rank highly in the league table that will be published and thus mitigate your future costs.
Optima Energy Management can provide extensive support and guidance to those participating in the scheme and can advise on:
Call 0121 222 5622 today for a free consultation with one of our dedicated advisors.
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