Carbon Reduction Commitment consultation sharpens compliance focus
The Government has today responded to the consultation on the Carbon Reduction Commitment (CRC), halting companies' obligation to pay for emissions in the first year (ie April 2010 to March 2011) in favour of data reporting only.
Payment for the amount of energy used will now start in year two. This will save participants having to buy two years' worth of allowances in April 2011. Additionally, in the second year (2011/12) extra weighting will be given to organisations that take action early to improve energy efficiency.
Elizabeth Shepherd, environmental partner at international law firm Eversheds comments: "Changing the first year of CRC into what is effectively a dress rehearsal will undoubtedly assist the introduction of the scheme and alleviate the cost burden which CRC will impose. However, it's best for businesses not to rest on their laurels as the consultation does not change a number of critical areas of responsibility. Administrative aspects of CRC have not changed and businesses should be preparing now by allocating internal responsibility for CRC preparation and compliance, data collation, consideration of group structures and budgets, and a review of landlord and tenant arrangements.
"It's doubly imperative for businesses to take early action to improve energy efficiency, as it will also impact on a company's position on the performance league table and the sums likely to be received or paid by way of bonus or penalty. By engaging in action now to reduce energy, companies are likely to see significant cost savings with direct impact on the bottom line."
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