LEGISLATION
least their cash flow with carbon allowances have to work to reduce your energy use and
What should you do now?
purchased six months in advance. Energy drive efficiencies. The time to act is now. Although the scheme
consultancy, TNEI Services, says it’s working does not start officially until 2010, the
hard to inform its clients of the new regulations
How much will it cost?
government has made it clear that organisations
and help organisations prepare for the new The new legislation will require a spend that have already acted to cut their energy use
legislation to avoid penalties and by taking early upwards of £40,000 each year on carbon and their carbon dioxide emissions will benefit
action secure a higher ranking in the league table allowances. under the new CRC scheme.
published each year. If your organisation qualifies you will have According to the government, it has
TNEI works with companies on energy to buy allowance to cover your CO2 emissions. attempted to design the scheme to be as
management and resource efficiency During the initial introductory phase (expected simple as possible, including self certification
programmes to help reduce energy costs and to last three years from April 2010) you will of monitoring, reporting and verification of
carbon emissions, so it feels it is well placed to need to buy allowances from the government in emissions.
assist companies in preparing for the CRC. a fixed-price sale. The aim is to encourage organisations to
The team has worked with large and small- From April 2013, allowances will be improve energy and carbon management skills,
scale clients across a range of business sectors to allocated through auctions with a diminishing particularly in relation to metering, reporting
deliver energy management programmes. number of credits available over time. and reduction and to focus senior management
Dan Smith, principal consultant of energy Allowances are expected to cost £12 per attention on the issues.
management explains: “Our energy management tonne of carbon. All these efforts can start now with the
team has been studying the proposed legislation To comply with the CRC, organisations will introduction of monitoring and targeting systems
to determine how our clients will be affected and submit their allowances to cover their emissions. and awareness raising training for staff and
how they can improve their energy efficiency in The CRC is to be ‘revenue neutral’ so senior management.
line with the CRC and generally to enhance their the government will gain no revenue from
energy efficiency and reduce costs.” the scheme. Instead, the money raised by the
Where do organisations
auctions will be divided among qualifying go for help?
What is the CRC?
organisations. You may already have received a government
In the 2007 Energy White Paper, the government At the end of each year, company leaflet issued via your electricity provider
announced its plans to tackle climate change performance, mainly based on absolute carbon advising you that the scheme is to be introduced.
by introducing new laws to cut carbon dioxide reductions since the start of the scheme, will be The government says it intends to follow
emissions and reduce energy use in large reported in league tables outlining the best and this with a major publicity campaign to raise
businesses and public sector organisations. worse performers in terms of carbon emissions awareness about the scheme and to ensure that
The result, which has yet to be finalised, will and reduction. people are well prepared for its introduction.
be a new legally binding climate change and Companies will receive payments back from
energy saving scheme called the CRC. the government in relation to their first year For more information visit the Defra website
The CRC will work as a ‘cap and trade’ emissions, plus or minus a bonus or penalty at www.defra.gov.uk or call TNEI on 0191 211
scheme - with a ceiling placed on the amount depending on their position in the league table. 1400.
of carbon allowances issued into the market.
Companies will have to buy these allowances to
cover the carbon emissions they produce.
The aim of the scheme is to significantly
reduce carbon dioxide emissions from
organisations covered by the scheme including
hotel chains, supermarkets, banks, schools and
large local authorities which together account for
around 10% of the UK’s carbon emissions.
By 2020, the government hopes to deliver
a 1.2 million tonne reduction in carbon dioxide
emissions from these large, non-energy
intensive organisations.
What it means for your
business?
If you use over 6,000 megawatt hours (MWh) of
electricity each year, which is roughly equivalent
to bills over £500,000, you will be included in
the scheme.
From April 2010, you will have to measure
and record your energy use and calculate its CO
‘
The CRC will work as a 'cap
2
emissions.
and trade' scheme
Long term, to cut your CRC costs, you will
’
SuStainable SolutionS april 2009 15
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