Carbon blanket will soon be spread to cover emissions from mainstream industry

The Times
March 31, 2009

Robin Pagnamenta

Energy companies are already familiar with measuring and trading their carbon emissions, but now regular businesses and other organisations are poised to follow suit.
Under the Government's Carbon Reduction Commitment (CRC) scheme, announced last May, from next year every organisation that consumes more than 6,000 megawatt hours of electricity in 2008 — or about £500,000-worth — will need to buy carbon allowances.
The mandatory cap and trade scheme will affect 5,000 large companies and local authorities in Britain and is aimed at slashing the country's total carbon emissions by an extra 1.2 million tonnes a year by 2020.
The proceeds will be paid back later to participants based on their organisation's performance during that year, as ranked in a league table based on carbon reduction and early action.

For many chief executives, keeping on top of changing rules and regulations like this is a constant game of catch-up.
But, for those that manage to stay one step ahead by preparing for rules before their introduction, it can be an excellent way to gain advantages over their rivals, Harry Morrison, of the Carbon Trust, argues.
Curbing emissions by reducing energy waste can also deliver something even better, especially in these straitened times: cost savings.
That's why a growing number of organisations are turning to the Carbon Trust Standard, a voluntary and independent certification scheme designed to help them monitor their emissions using a respected, common methodology — and to demonstrate the cuts they achieve.
“We feel strongly that leading businesses that take action now can get a double benefit, both in preparing for the legislation and also in terms of their public reputation,” he said.
“These groups really need to be thinking now about how they are going to comply with the CRC scheme and achieving the Carbon Trust Standard will be a very good start.”
Sixty-five groups have already signed up to the standard, including some of the best-known names in British business such as B&Q, Morrisons and O2 and a string of public sector organisations like Woking Borough Council, the Crown Prosecution Service, London Fire Brigade and King's College London.
Adrian Swindells, general manager of Abbey Corrugated, the packaging group, said: “We now understand that having gained the standard we will have a higher ranking in the CRC league table. This will definitely reduce costs to the business. We are now much better on business housekeeping with controlled start-ups and shutdowns that help to reduce energy use.
“And the standard has aligned closely with other certifications that the company has, ensuring we have robust systems and procedures to continually reduce our carbon footprint and energy consumption.”
Mark Willcox, development director at Branston, the foods group, said: “Branston has improved its carbon efficiency by 6 per cent in 2008. Gaining the Carbon Trust Standard also makes us eligible for a significant reduction under the CRC.”
Not only is the standard a good way for organisations to prepare for the introduction of the CRC and to bolster their reputation among consumers, it is also delivering real cash savings by identifying waste in their use of transport fuels, electricity, gas and oil.
“The 65 groups that have signed up have already achieved savings totalling £73 million,” said Mr Morrison, who describes the programme as an “holistic package that is designed to measure, manage and reduce their emissions”.
Organisations that sign up to the Carbon Trust Standard undergo a rigorous analysis of their energy use across all their buildings, plants and vehicles over a three-year period.
A comprehensive set of data on emissions is then produced which, assuming the right actions have been taken, can hopefully be shown to be heading down over time.
While membership of the standard does not in itself ensure compliance with the CRC scheme, it is one of the factors that counts towards performance in the league table, as part of an organisation's early action score.
It also perfectly positions companies for its introduction by ensuring they are measuring and reducing their emissions using the correct methodology and focusing management attention on the issue.
The financial impact of the CRC scheme is set to grow over time. An introductory phase is due to start in April 2010, under which all allowances will be sold at a fixed price. However, from April 2013, allowances will be allocated through auctions, with the number of credits available being reduced over time.