News analysis Carbon reduction
Avoiding
the double

whammy
Energy-hungry companies and public
organisations that are liable to pay for
carbon allowances from April 2010
are being given a financial reprieve – a
move welcomed by the building services
sector. Carina Bailey reports
n
The UK-wide Carbon will receive a sum of money back,
Reduction Commitment known as a ‘recycling’ payment.
(CRC) policy was introduced The scheme will be introduced in The Carbon Reduction Commitment
to bring larger companies and two phases. During the introductory
encompasses companies such as
organisations into a carbon- phase, an unlimited amount of
property developers and retail chains
allowance scheme of the sort that allowances will be sold by the
had already been applied to the government during the sales period to shell out two lots of money, but own right and enter the league table
energy-intensive industrial sector. in April 2011 and April 2012. The it’s come a bit late – it’s created independently. The league table
Under the CRC, those firms and second phase will begin in 2013 unnecessary work already. It is the ‘public face’ of the whole
public bodies that consume at least and will see the full CRC scheme would have helped if we’d been scheme, says Field. It will not only
6,000MWh of electricity a year will introduced and the amount of given a heads up a little earlier.’ affect an organisation’s reputation,
buy carbon allowances upfront, for allowances available will be capped. But John Field, director of carbon but also the repayments they
the year ahead, initially at a cost of About 5,000 organisations are management at Power Efficiency, receive according to their ranking.
£12 per ton of CO2, which can later expected to participate. an energy management company, Farebrother agrees that this could
be traded with other organisations David Farebrother, environmental describes it as a very important be of great help to Land Securities,
should the need arise. director at property group Land move: ‘It hasn’t delayed payments which is a mixture of offices and
Originally the Department Securities, believes that the reprieve at all because the payment for the retail outlets, but he adds: ‘There
for Energy and Climate Change will help companies like his, which first year was always going to be isn’t clarity about whether that
(DECC) had intended to make moved to the end of the year, but it would apply to Land Securities
those involved pay for their 2010 has avoided the double whammy – density of energy usage is very
carbon allowances retrospectively, of the first payment in April 2011. different for offices and shopping
as well as paying ahead for their
What we really
I think it’s welcome and quite centres. If you’re treating them
2011 allowances. But when
want to do is see the
sensible.’ as one whole scheme, there is a
DECC released its final version Richard Hipkiss, a principle potential for imbalances between
of the policy last month, it not
final regulations –
consultant, and sales and certain types of properties.
only renamed it the Carbon
all they’ve done is
marketing director at energy ‘What we really want to do is see
Reduction Commitment Energy company i-prophets, also the final regulations. All they’ve
Efficiency Scheme, with the aim of
hinted at what they’re
welcomed the scrapping of the done is hinted at what they’re
emphasising its key purpose, but it
planning
double payment. ‘It was quite planning to do. It still needs clarity
also brought in a one-year financial ludicrous. It was being viewed as and definition.’
reprieve for those affected.
– David Farebrother
“well, what’s the point other than to Farebrother says Land Securities
Under the change, from April build up the government’s coffers?” was eager to see the league table
2010 for the first year, carbon falls under the scheme. However, I think that’s a positive step forward split into different sectors, such as
emissions will only have to be he points out that guidance for to get people to buy into the transport, property, small industry
reported, rather than allowances participants is still awaited from scheme.’ and so on, and the issue is now the
bought and traded, to ease the DECC. Another change that Field company’s biggest disappointment.
burden on cashflow. This will mean ‘Although DECC has said it applauds is DECC’s decision to ‘Government has turned round
that participants will only have to wants to relieve the burden in allow large subsidiaries consuming and said “Mummy knows best and
submit details of their emissions terms of people paying two lots of at least 6,000MWh to take part we’re not doing that,” which I feel
during 2010 and 2011. At the end allowances in one year, what it’s separately from their organisational is patronising,’ argues Farebrother.
of each trading year those who effectively done is put the thing back group. This should enable two very ‘They should have split them up.
have made, or are continuing to a year,’ he says. different arms of the same company The way they’re doing it is blatantly
make, energy efficient measures ‘It’s clearly helpful not to have to participate in the scheme in their unfair. What’s the point of a
18 CIBSE Journal November 2009 www.cibsejournal.com
CIBSEnov09 pp18-19 newsanalysis.indd 18 23/10/09 13:12:21
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