LEGISLATION
Making the carbon
reduction commitment
From april 2010, over 5,000 uK organisations will be affected by legislation that will require
them to buy allowances to cover their carbon emissions. energy consultancy, tnei Services,
explains what this means for businesses.
E
nergy is top of the business require companies to spend upwards of £40,000 allowances to cover their annual emissions. A
agenda for all companies and in each year on carbon allowances. whole range of organisations will be affected
all industry sectors - driven up Although the regulations are still being including banks, schools and hotels.
the agenda by rising energy costs finalised by the Department of Energy and in April 2011, these companies will then be
and perceived threats to the security of supply. Climate Change (DECC), companies are expected to buy two years’ worth of allowances
gone are the days when energy was viewed being encouraged to act now in preparation to cover the carbon dioxide emissions they
as merely a commodity that didn’t feature too for the CrC. anticipate producing in the following year and
heavily on the expense sheet - in the current The legislation will have a phased to cover the emissions generated in 2010. The
climate energy is of prime concern as companies introduction starting in 2010 with organisations payment will be recycled back to the company
look to cut costs and drive efficiencies in these expected to monitor their energy use and with either a bonus or a penalty depending on
uncertain economic times. carbon emissions and during 2011 buy carbon their position in an all important carbon
set against this economic backdrop, new allowances to cover their emissions. Companies league table.
legislation is expected that will force companies affected will be expected to submit details of The environment Agency will manage the
to look even closer at their energy use and their annual energy use from next year. league table that will be crucial in determining
identify ways to cut energy bills and their The rules are being introduced as part of whether companies get bonuses or penalties for
resulting carbon emissions. the government’s aims to deliver reductions their carbon performance. Various factors will
From April 2010, over 5,000 organisations in in carbon dioxide emissions. Organisations, be applied to determine league table position,
the UK will be hit by new green laws that will in both the public and private sector, that use but one crucial aspect will be early action to cut
require them to buy allowances to cover their over 6,000MW hours of electricity, roughly carbon emissions.
carbon emissions. The new legislation, called equivalent to energy bills over £500,000, will be Few companies are aware of the new law
the Carbon reduction Commitment (CrC) will affected by the CrC and expected to buy carbon and how it will impact on their business, not
14 SuStainable SolutionS april 2009
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