UK firms not ready for government green plan: consultants
February 20, 2010
Written by Editor, in Carbon, Green News, United Kingdom
According to Reuters, “UK businesses are unprepared for a complex government plan to cut corporate energy use and it will only deliver 1.4 percent of its carbon reduction target for 2020, energy consultants McKinnon & Clarke said in a report.
The government hopes to reduce greenhouse gases by 34 percent by 2020 below 1990 levels through renewable energy, energy efficiency and other measures.
The Carbon Reduction Commitment Energy Efficiency Scheme (CRCEES) is a mandatory scheme starting in April 2010 that will force businesses like banks, hotels, hospitals and schools to help Britain cut carbon emissions by 3.2 million tonnes by 2020.
“Put into perspective, the scheme will deliver only 1.4 percent of the total reduction target set by the government,” Callum F. Stuart, international project developer manager at McKinnon and Clarke, said in a statement.
Firms will have to monitor and report energy usage from April 2010, and buy credits from the government for 12 pounds ($18.46) each to cover carbon dioxide emissions from 2011.
A survey by the consultancy showed that 54 percent of respondents were not sure whether they fell under the minimum 6,000 megawatt qualifying criteria. Three in five had not accounted for the financial implications of participating in the scheme.
“At the lowest qualifying level, a typical organization will pay 45,000 pounds a year to advance purchase allowances at a rate of 12 pounds per tonne of carbon dioxide,” Stuart said.
The scheme is designed to reward companies which cut their emissions, but past performance is not considered and many businesses have no room to reduce emissions further, the report said.
“It may work in the company’s best interest to have a high consumption for April 2010-March 2011 as this benchmark is what individual business is measured against in assessing carbon reduction performance,” Stuart said, meaning that many firms could defer taking action until April 2011.
The scheme also aims to create incentives for firms to invest in energy efficiency improvements and cut energy costs by 1 billion pounds by 2020.
The initial purchase of carbon credits will cost firms around 640 million pounds, McKinsey and Clarke said.
“With this amount of capital being locked away, is it realistic to think that these same companies will have further capital available to invest in energy efficiency improvements?,” Stuart said.”
