Carbon Reduction commitment causing confusion 30 April 2010

Nearly half of UK companies that should be involved in the Carbon Reduction Commitment Scheme believe that government advice on the legislation is inadequate, and are unclear on how to forecast their CO2 emissions and purchase carbon allowances.

Those are two of the key findings of energy giant npower's Business Energy Index (nBEI), an annual survey tracking business opinion on energy use and carbon emissions.

The CRC energy efficiency scheme went live on 1 April and will affect many of the UK's larger organisations, which will need to purchase allowances to cover their carbon emissions.

npower's study reveals that 44% of participants believe the level of guidance on the CRC has not been adequate, while 49% said they do not understand what's required of them to buy carbon allowances, and 44% are also unclear on forecasting their CO2 emissions.

David Titterton, of npower Energy Services, says that this could leave participants faced with unexpected costs as a result of miscalculations. Allowances are initially fixed at £12 per tonne of CO2, he advises, but businesses that buy too few allowances could need to top-up their purchases under the scheme's 'safety valve' mechanism or on the open market, at a higher price.

"As we come out of recession it's no surprise that businesses are relegating emission reduction in favour of managing costs. But it's important that they do not ignore the importance of reducing carbon in the long term," says Titterton.

"With the CRC live, there is now a direct link between participating organisations' carbon emissions and their bottom lines, and businesses that fail to deliver carbon reductions in the future will face financial and reputational consequences."

Brian Tniham

Related Companies
npower

This material is protected by MA Business copyright
See Terms and Conditions.
One-off usage is permitted but bulk copying is not.
For multiple copies contact the sales team.