Business warned about Carbon Reduction Commitment

There has been a big public awareness campaign today warning businesses about the Carbon Reduction Commitment, which comes into effect next month.   This is a scheme aimed at (you guessed it) reducing carbon emissions.

The big news is that companies that fail to register their energy use by next month will be hit with fines that could reach £45,000 under the little-known rules. 

Those that do participate in the Carbon Reduction Commitment (CRC) initiative by declaring their energy use will face charges for every ton of greenhouse gas they produce.  These payments are expected to average £38,000 a year for medium-sized firms, and could reach £100,000 for larger organisations.

Many businesses are (understandably) aggrieved at this prospect fines which will put pressure at a time when bottom lines are shrinking.

Any company or public sector organisation that consumes more than 6,000 megawatt hours (MWh) of energy a year – meaning a power bill of about £500,000 – must register its energy use by the end of next month.  From April 2011, they will need to buy permits for each tonne of carbon dioxide emitted. For those using 6,000MWh, that could mean £38,000.

Of about 4,000 organisations estimated to qualify for the scheme, only 1,229 have registered to date.   Missing the Sept 30 deadline leads to an immediate £5,000 fine, and £500 for each day after that, up to a maximum of £45,000.

Another 15,000 smaller organisations are also required to register and could be expected to buy permits in the future. If they miss the September deadline, they face fines of £500.

For more information click here for the Environment Agency (who administer the scheme).