Bodies not ready for carbon laws

Nov 12 2009 by Tony Henderson, The Journal

MANY organisations in the North East are unprepared for new carbon cutting legislation which comes into effect next year, energy experts have warned.

A study has highlighted that the majority of organisations affected will struggle to collect and verify their energy data – risking unnecessary costs, penalties and in extreme cases facing prosecution.

The Carbon Reduction Commitment (CRC) simulation exercise has also revealed that when “trading” carbon allowances in a virtual online auction, many organisations were exposed to unnecessary financial risk and potential cash flow problems.

This was because the ‘trading’ teams had no clear purchasing strategy and lacked the power to influence decisions that would be required under the real CRC.

In advance of the new legislation, One North East commissioned Newcastle-based energy consultancy TNEI Services to run a 12-month simulation of the CRC Scheme to give organisations in the region a head start and allow them to get CRC-ready.

One of the key aims of the project, only the second of its kind in the UK, is to reduce the risk of businesses incurring penalties.

The CRC comes into effect in April with qualifying organisations required to buy carbon allowances to cover the emissions they produce. Around 30 organisations in both the public and private sector which will be affected by the CRC are involved in the year-long simulation.

The project is providing participants with a simulation of the CRC processes from energy and carbon data collection and reporting and the compilation of performance league tables to experiencing virtual carbon trading days. One North East leadership specialist, Kate Hatton said: “As part of our support for regional businesses we identified the opportunity to assist organisations to be better prepared .

“The CRC presents major challenges for organisations with high energy bills. By taking part in our simulation, organisations can gain practical experience of the legislation, get free expert advice and pro-actively cut their carbon dioxide emissions.”

The exercise showed that a significant number of organisations are still unprepared for the rigours of monitoring and reporting energy use and do not have a CRC team in place to both plan and deliver the savings required, or with the purchasing power to secure carbon allowances at a reasonable cost.

Helen Nisbet, project manager for the CRC Simulation at TNEI said: “We would urge all other companies and organisations that may be affected by the CRC not to underestimate the resourcing issues of measuring, managing and reporting carbon emissions. Ultimately there will be both financial and resourcing costs that need to be budgeted for.”