The Food and Drink Federation is putting together guidance to help members work out whether they are subject to the Carbon Reduction Commitment (CRC).

Under the CRC scheme, firms must in future predict their energy usage and purchase an equivalent number of CRC allowances. The money will subsequently be refunded plus or minus a certain amount depending on the extent to which they have reduced usage and their performance relative to other participants in the scheme.

The price of the allowances will initially be fixed at £12/t of carbon dioxide, but will subsequently go up or down as they are traded - creating a new carbon market.

Firms failing to register with the scheme or failing to report their energy usage on time will be subject to substantial fines.

The CRC covers emissions not already covered by climate change agreements and the EU emissions trading scheme. Working out which food manufacturers might be affected is complex, however, said the FDF. "It's not as simple as saying all our members are exempt. We're working with a consultant to produce guidance that will help members work this out."