Knowledge Centre
7th October 2009
The Government's Carbon Reduction Commitment, details of which were announced today, could push up the energy bills of small businesses, an industry group has claimed.
The Forum of Private Business (FPB)'s warning comes as the Government explained the specifics of the commitment, which aims to cut carbon emissions by over four million tonnes by 2020. From 2011, it will require businesses to buy allowances for their C02 emissions at a rate of £12 per tonne.
The scheme will launch on 1 April 2010, with businesses required to report their emissions for the first year (2010/11). From 2013, the Government will cap the number of allowances available each year and the total amount will be auctioned.
While the scheme is aimed at "large public and private-sector organisations", FPB spokesperson Chris Gorman told More Than Business News: "It is perfectly possible for a small business employing a handful of people - manufacturers for instance - to spend £500,000 a year on electricity.
"Soaring utility prices already provide enough of an incentive to keep energy consumption to an absolute minimum. Forcing these additional charges onto small businesses will no doubt be viewed simply as another stealth tax by many business owners.
He added: "Perhaps instead of spending vast amounts of money devising and implementing this scheme, the Government could have provided free advice and assessments aimed at helping businesses understand how they can cut energy consumption; reducing costs for them and helping the environment at the same time."
Carbon Reduction Commitment "could hit small businesses hard"
The Forum of Private Business (FPB)'s warning comes as the Government explained the specifics of the commitment, which aims to cut carbon emissions by over four million tonnes by 2020. From 2011, it will require businesses to buy allowances for their C02 emissions at a rate of £12 per tonne.
The scheme will launch on 1 April 2010, with businesses required to report their emissions for the first year (2010/11). From 2013, the Government will cap the number of allowances available each year and the total amount will be auctioned.
While the scheme is aimed at "large public and private-sector organisations", FPB spokesperson Chris Gorman told More Than Business News: "It is perfectly possible for a small business employing a handful of people - manufacturers for instance - to spend £500,000 a year on electricity.
"Soaring utility prices already provide enough of an incentive to keep energy consumption to an absolute minimum. Forcing these additional charges onto small businesses will no doubt be viewed simply as another stealth tax by many business owners.
He added: "Perhaps instead of spending vast amounts of money devising and implementing this scheme, the Government could have provided free advice and assessments aimed at helping businesses understand how they can cut energy consumption; reducing costs for them and helping the environment at the same time."
Tags: Green, Regulations
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Free advice is available. Try contacting the Carbon Trust.
Posted: 22 Oct 2009 09:16I work with the legal issues surrounding this issue on a daily basis and again it’s unfortunate that there has been a disjunct between an existing ‘carbon reduction’ initiative and the CRCEE. Companies within the CRCEE are deemed to consume ‘grid averaged’ electricity i.e., mainly brown fossil-fuel produced electricity even if they actually purchase low carbon or renewable electricity. It is crazy that the sourcing of renewable energy is not taken into account in the performance league tables which are to be produced at the end of each Scheme year although DECC have sought to appease complainants with the announcement that there will be a separate table produced alongside the performance table showing renewables utilisation - recognition for those who are investing in renewables projects and supplies, but no further financial incentive for so doing. In fact through the CRCEE they are being penalised because they are investing in low or zero carbon technology to reduce their carbon emissions but will be penalised financially under the CRCEE because this cannot be taken into account in relation to their compliance with the CRCEE scheme.
Posted: 15 Oct 2009 17:41This may well affect renewables development at the smaller end when companies realise that they will be financially worse off for "trying to do the right thing" and many potential projects may well founder.
Some fair points raised there, especially when the time taken to create the scheme could have been put to more practical use. The FPB website has some useful pages of info that every office should take to reduce its environmental impact. www.fpb.org/hottips/285/Top_10_tips_for_a_green_office.htm
Posted: 9 Oct 2009 09:36