UK businesses face new carbon reduction legislation on 1 April and risk fines if non compliant

Industry comment

Published: 06 April

Author: Alan O'Brien

Type: Industry comment

Year: 2010

The Government’s Carbon Reduction Commitment (CRC) Energy Efficiency Scheme comes into effect this Thursday, 1 April 2010. The CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) is the UK's mandatory climate change and energy saving scheme.

It is central to the UK’s strategy for improving energy efficiency and reducing carbon dioxide (CO2) emissions, as set out in the Climate Change Act 2008. It has been designed to raise awareness in large organisations, especially at senior level, and encourage changes in behaviour and infrastructure.

Around 25,000 UK businesses are now thought to be included in the scheme – far higher than the 5,000 initially anticipated, according to government run body Business Link.

The CRC is designed to improve energy efficiency in businesses, effectively by putting a price on emissions from energy use. The scheme is central to delivering the UK’s commitment to reduce carbon emissions by 80% by 2050.

“It was originally estimated that around 5,000 firms qualified for this new legislation and its inevitable cost impact – but the latest figures suggest the number of organisations affected could be as high as 25,000,” said Sabien CEO Alan O’Brien. “This is significantly higher than was first anticipated, but in our experience the majority of UK companies and clients we deal with have been preparing over the last two years for the scheme and take their responsibility and commitment very seriously,” he added.

“With 1st April rapidly approaching, organisations are now focusing their attentions on ensuring they’re fit and ready to adhere to the scheme’s requirements and to step up the pace of their energy reduction initiatives. Besides the financial cost of the CRC scheme, now that consumers are increasingly questioning businesses’ environmentally-friendly credentials, the reputational risk of being an organisation at the bottom of the carbon league tables’ just plays into the hands of those competitors who have outperformed their peers,” he added.

Besides the increased number of participants the carbon savings benefits could double.

The Department for Energy and Climate Change (DECC) initially claimed the scheme would cut carbon emissions by 4.4 million tonnes a year by 2020. However the Environment Agency, which will administer the CRC, now estimates the savings to be 11.6 million tonnes of carbon a year.

As providers of energy efficiency technology for both public and private sectors, Sabien is ideally placed to help mitigate the impacts businesses face from the new legislation and contribute to its carbon objectives.

“Organisations are now aware that technology already exists to help them significantly reduce their energy consumption and benefit from real cost savings,” O’Brien said.

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