Companies must act now to avoid CRC fines

A new report has warned that the government’s Carbon Reduction Commitment (CRC) initiative is unlikely to cause carbon emissions to fall within the next five years.

Research by Verdantix found that 4,000 of the 5,000 businesses and organisations taking part in the scheme will fail to reduce carbon emissions during the first phase of CRC, which will run from 2010 to 2013.

Verdanix discovered that most companies are unaware of their energy consumption levels, and that the general trend at the moment is increasing, rather than decreasing, carbon emissions.

Organisations and businesses were chosen to take part in the scheme on the basis of their annual energy consumption.

Any organisation in the public or private sector consuming more than 6,000MWh of electricity in 2008, and spending more than £500,000 per year on electricity, is obliged to take part.

According to Verdanix, the biggest challenge in the first phase of CRC will be identifying compliance to CRC, and getting businesses to report their carbon emissions.

During that phase, organisations will be able to buy CRC credits from the government, costing £12 for every tonne of carbon dioxide they emit.

The second phase, starting in 2013, will be much tougher, with a yet to be decided cap on the emissions of all businesses in the scheme.

Verdanix recommends that businesses who do not yet know their carbon emissions levels should act now to avoid heavy penalties during the second phase.

Some organisations are already heeding Verdanix’s advice, voluntarily choosing to cut back their carbon emissions.

Vodafone and Cadbury’s have released emissions reductions plans, British Airways requires customers to opt-out rather than opt-in to carbon offsetting when flying, whilst BT and HSBC have pledged to start using 100% renewable energy.