Firms risk missing carbon reduction scheme deadline
The CRCEES covers emissions not already covered by climate change agreements or the EU emissions trading scheme and applies to organisations who use more than 6,000MWh of electricity a year (equivalent to an annual electricity bill of about £500,000).
However, to date, just 1,229 organisations including AG Barr, Vitacress Salads, Tangerine Confectionery, General Mills (Berwick) and Alpro (out of an estimated 5,000 meeting the criteria) have registered for the scheme with just over a month to go, according to the Environment Agency.
Dave Lewis, head of business energy services at gas and electricity supplier npower, told FoodManufacture.co.uk that the low take-up was worrying.
“The slow rate of registration so far also indicates that many organisations may not be actively tracking their energy use from April 1 this year in preparation for the year end footprint report. The longer organisations take to track this, the more challenging the task will become.”
Many firms recently surveyed by npower also said they were unclear about how the scheme worked and what was required from them, he claimed.
Chris Davenport, director at energy consultancy M&C Energy Group added: “Many organisations run the risk of missing the deadline and incurring significant fines.
“Additionally many will not have established the full extent of their organisational structure, a requirement necessary for full compliance with the scheme as set out by the regulations, and are therefore at risk of failing to collect the necessary energy data in time in order to accurately complete their registration."
Substantial fines
Participants in the scheme must predict their annual energy usage and purchase an equivalent number of ‘allowances’. Their 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 results will also feature in a published league table.
The price of the allowances has initially been fixed at £12/t, but will subsequently go up or down as they are traded, creating a new carbon market. From April 2013, allowances will be auctioned by the government, with fewer available each year.
The scheme starts with a ‘reporting year’ (April 2010- April 2011), with the first sales of allowances next April, which could create significant cash-flow problems for some participants as the allowances are paid for upfront with the money paid back (and not necessarily in full) at the end of the year, said Davenport.
Businesses failing to register by September 30 will be be charged £5,000 and a further £500 for every day they delay registration thereafter.
