Uk companies could end up handing the government a windfall of more than £230million in penalties unless they move fast to comply with new Carbon Reduction legislation.
Recent surveys suggest at least 66 per cent of the 5,000 businesses which will be affected by new regulations are unaware of their responsibilities and possible repercussions.
Glasgow-based Energy Solutions Consultants estimates firms could end up forking out at least £70,000 each if they don’t comply with the new rules which come into force on April 1. The CRC Energy Efficiency Scheme, formerly known as the Carbon Reduction Commitment, is a compulsory energy efficient emissions trading system central to the UK’s strategy for improving energy efficiency and reducing CO2 emissions.
The scheme is mandatory for organisations which have at least one half-hourly electricity meter. If they use at least 6,000 megawatt-hours (MWh), or have an annual energy bill of £500,000 or more, they will have to register and comply with the legislation.
However, if their half-hourly metered energy supply is below 6,000MWh they will still have to make an “information disclosure” and prove they are exempt.
Failure to do so incurs a fine of £5,000 and £500 per day until it is submitted. It is estimated that another 15,000 businesses could fall into this category.
The scheme, which is enforced by the Environment Agency in England and Wales and SEPA in Scotland, is likely to affect government departments, universities, hospitals, schools, banks, retailers, hotel chains, large firms, factories and many others.
William Morris, managing director of Energy Solutions Consultants said: “A number of recent surveys have shown that between half and two-thirds of businesses are either unaware of their duties or haven’t started doing anything about it.
“If you add the automatic £5,000 fine each company will get for failing to submit their information on time with the minimum penalty of £50,000 added to energy costs it’s a lot of money. But, there’s an additional fine of £500 a day until the information is submitted to the proper authorities and gathering it all together could take a month or more, that’s at least another £15,000 on top.”
Firms using more than £500,000 worth of gas, electricity, water, oil and other energy sources have to submit a “robust” report detailing their usage dating back to 2008.They will then have to buy carbon allowances at £12 per tonne to off set their emissions and submit a roadmap of how they plan to cut emissions.