UK to go ahead with domestic emissions scheme

Mar 13, 2009 01:00 AM

The UK is going ahead with a plan to make energy-intensive businesses, including banks, hotels and schools, cut their energy use and carbon emissions, the country's Department of Energy and Climate Change (DECC) said.
In March 2007, EU heads of state and government committed to a binding target to slash the EU's greenhouse gas emissions by 20 % in 2020 compared with 1990 levels. This will be raised to 30 % in the event that a new global climate agreement is reached that commits other industrialised nations, including the US, to comparable emission reductions and obliges "advanced developing countries" (i.e. China and India) to contribute as well.

At a landmark summit in December 2008, EU leaders reached agreement on energy and climate change measures to deliver the block's ambitious climate objectives. It set the UK's emissions reduction target for 2020 at 17 % (2005 levels).
The Carbon Reduction Commitment (CRC), which includes all central government departments and local authorities, is a mandatory scheme that will help Britain cut greenhouse gas emissions by four mm tons by 2020, the equivalent of taking a million cars off the road.

DECC published a guide to help affected businesses prepare for the scheme's start and the government launched a consultation for the next stages, it said.
"The CRC could help business save a total of £ 1 bn (EUR 1.06 bn) by 2020, whilst also helping them play their part in the fight against climate change," the UK's Energy and Climate Change Minister Joan Ruddock said.

The scheme starts in April 2010, when some 5,000 British firms that spent over 500,000 pounds on electricity in 2008 must register and disclose their energy use and carbon footprints. At the end of 2010, the companies will have to retroactively buy carbon allowances from the government to cover their emissions for that year. Following that, businesses must buy allowances every April starting in 2011, based on their expected annual emissions. The revenues raised will be recycled back to participants based on improvements made in energy use and emissions cuts.
"Those who are making most improvements in energy efficiency will be recognised and financially rewarded," DECC said.

But critics say many companies are still uninformed about their upcoming commitments, despite government efforts.
"Many companies remain unaware and unprepared for what the CRC will involve, and are in for a real shock when these changes become law," said Neil Bentley of the Confederation of British Industry (CBI), which represents around 240,000 businesses that employ a third of Britain's workforce.

Consultants WSP UK estimate compliance costs could run as high as 500,000 pounds for chain stores, and around one million pounds for the largest participants.
"Firms needs to start gearing up for the changes now by thinking about how they plan to monitor their energy use," added CBI's Bentley.

The scheme will not affect installations already participating in the European Union's emissions trading scheme.
Britain's emissions in 2007, the latest figures available, were 639.4 mm tons of carbon dioxide, already well within its Kyoto target of 12.5 % below 1990 levels. The UK has also committed to a further EU-wide goal to reduce 1990 levels by 20 % by 2020.

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