Act now on new carbon footprint measures advises green power business

Although the government’s proposed Carbon Reduction Commitment (CRC) will be implemented in stages from 2010 to 2013, it will affect businesses much sooner because charges are likely to be based on consumption from January 2008 to December 2008. Other initiatives in the CRC proposals are incentives for organisations that take early action to reduce emissions; a charge for energy consumers that exceed their carbon allowance; and a carbon league table with cash rewards for star performers and stiff penalties for under-achievers. Says Alan Barlow, managing director of Manchester-based Ener-g Combined Power: “The regime will affect any organisation whose annual mandatory half-hour metered electricity consumption is more than 6000MWh. These organisations should avoid the pitfall of not taking action until 2010, because measures implemented now will reap considerable benefits, not only in terms of immediate energy savings, but also significantly reducing costs when the CRC bites.” The CRC will mean any organisation consuming more than 6000MWh of electricity annually must buy allowances on top of its utility bill for all energy it uses, not just electricity. “The price has not yet been fixed, although Defra officials say it will range from £8 to £15 per tonne,” added Barlow. “Although there will be bonuses and penalty payments relative to your position on the table, public perception will be an equally powerful driver for large services organisations and retailers.” There will be no legal requirement for organisations affected by the CRC to take action until 2010, however Defra’s ‘early action metric’ scheme will encourage the implementation of carbon reducing initiatives sooner rather than later. “Organisations that voluntarily install non-mandatory automatic metering equipment before 2010 will receive bonus points when the CRC enters the statute books,” he said. The CRC will hit organisations hardest after 2013 when a cap-and-trade system will be introduced, enabling the government to tighten carbon emissions every year. However, organisations will still need to buy CRC allowances in the initial phase, even though the limit is not capped. Barlow concluded: “There is every incentive for business affected by the CRC to get their act together now, rather than wait until action is forced on them by legal requirements.”