Carbon Reduction Commitment

In 2008 the Department for energy and climate change announced that the UK would be launching its own carbon trading initiative called the Carbon Reduction Commitment.

Download the latest briefing from Clifford Chance 14th July 2011

The aim, was to encourage UK businesses to reduce year on year their carbon emissions through an incentives and penalties scheme using carbon trading as a way of buying and selling the outcomes of energy efficiency or energy waste. However, this has all changed now with the cap and trade element no longer part of the scheme and the recycling of money no longer happening. In essence the scheme is now a tax and so businesses need to plan for that cost. However, advice from CIPFA and the Committee on Climate Change is that we must wait until the more recent consultation is completed before setting aside budgets and contingencies.

The qualification rules, however, remain unchanged i.e. organisations that consume more than 6,000 megawatts of electricity will automatically qualify for the scheme and the first year of purchases will now happen in 2012/13 and not as a future purchase but as a retrospective tax.

It is an evolving scheme that requires a degree of expertise and understanding of the financial risk to businesses in the UK, it is also a legal risk due to the penalties that apply for non compliance.

Green 2020 can help provide that guidance and expertise to help UK businesses mitigate that risk and assist through our energy management practice a year on year reduction in emissions.

Call us to find out more about the CRC and see how we can help you navigate through the scheme and get best value out of it. Call us on 0207 193 7341.