For the first time large non-energy intensive organisations, which account for about 10% of UK CO₂ emissions, will be legally bound to closely monitor and report their emissions from energy use in preparation for carbon trading.   The scheme will also give people and businesses the opportunity to compare organisations’ efforts to combat climate change for the first time.
 
The Government scheme, known as the CRC Energy Efficiency Scheme, will include household names such as Sainsbury’s, Tesco, Marks & Spencer, John Lewis, Barclays, HSBC, Hilton and Marriott.  It will also include manufacturers and construction companies, for example Procter & Gamble, Unilever and Balfour Beatty.  These businesses will be ranked according to reductions in energy use and improvements in energy efficiency alongside public sector organisations such as NHS trusts, local authorities and government departments.
 
Analysis for the Environment Agency suggests that the scheme could reduce CO₂ emissions by up to 11.6 million tonnes per year by 2020 – the equivalent of taking four million cars off the road. It is also expected to save organisations money through reduced energy bills – benefiting the economy by at least £1billion by 2020.
 
More than 20,000 organisations will have to register with the Environment Agency by the end of September this year.  Around 5000 of these organisations – those that used at least 6000MWh of half hourly metered electricity in 2008 – will have to report their emissions and, from 2011, buy allowances for every tonne of CO₂ they emit.  During the introductory phase in 2011 and 2012, allowances will be sold at a fixed price of £12 per tonne of CO₂.
 
All the money raised from allowance sales will be recycled back to participants according to their energy performance.  The best performers will get more money back than they paid, while poor performers will get less.  From next year, the Environment Agency will publish an annual league table highlighting the best and worst performers in CRC.
 
From 2013 a cap and trade system will be introduced.  This will limit the total amount of carbon dioxide these organisations can emit by capping the total number of allowances available and selling them at auction.
 
A further 15,000 organisations that use less than 6,000MWh, but still have at least one half hourly electricity meter, will be obliged to register and declare their electricity use.
 
Tony Grayling, Head of Climate Change and Sustainable Development at the Environment Agency said: “The CRC Energy Efficiency Scheme is an opportunity for organisations to do their bit for the planet and save money.
 
“The league table is a very public judgement on how seriously you take your environmental responsibilities. If organisations don’t take up the challenge, there is a risk to their reputation and their pockets.”
 
The biggest CO₂ savings are likely to come from hotels, restaurants, retail and the public sector.  For the majority of these organisations, better management of heating, lighting and computer systems will yield quick results.
 
“Carbon reduction doesn’t need to be complicated or expensive,” says Tony Grayling, “There are simple and inexpensive steps every organisation can take to cut their energy consumption – from motion sensors for lighting in offices to higher efficiency motors in manufacturing.”
 
Organisations that qualify for CRC must register for the scheme with the Environment Agency by 30 September 2010.