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New Carbon Footprint Measures – Act Now Advises Chamber August 13, 2007

Posted by liverpoolchamber in Business, Chamber Services, Environment, Legislation, News, Policy, Services.

Smoking Chimneys Start preparing now for a new carbon emissions trading scheme, which will hit up to 5,000 UK organisations – starting next year, advises Chamber Utilities™.

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.

Explains Paul Backx, managing director of Utility Auditing, which delivers the Chamber Utilities™ service: “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.”

Typical organisations affected are large services sector businesses such as retail chains and financial service providers, as well as a wide range of public bodies including hospitals, local authorities, and prisons.

It was thought that schools might be exempt, but indications from the Defra consultation suggest that this will not be the case.

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,” commented Backx.

He believes the emissions league table will be especially important to large retailers whose green credentials are critical to success in the marketplace.

“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,” added Backx.

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,” explained Backx.

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.

He continued: “There is every incentive for business and public bodies affected by the CRC to get their act together now, rather than wait until action is forced on them by legal requirements.”

Services offered by Utility Auditing and its parent group Ener-g enable organisations to make the transition cost effectively and efficiently.

“For example, combined heat and power (CHP) equipment means that emissions are significantly lower, so fewer CRC allowances will have to be purchased, delivering a new beneficial effect on bottom-line performance,” said Backx.

“This becomes still more attractive on the balance sheet when combined with the utility bill savings resulting from greater efficiency, not to mention the environmental benefits reflected in an organisation’s annual report,” he added.

For further information contact Chamber Utilities™ on 0845 120 2423, www.chamberutilities.co.uk



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