Carbon Reduction Business

Please note: The content of this article is in the process of being updated to reflect the latest CRC scheme design. Updated content will be posted shortly. The Department of Energy and Climate Change (DECC) website contains complete details on program requirements and design.

Are You in the Carbon Reduction Business?

Carbon reduction business is very real and is soon set to have a very big impact for those organizations soon to be affected by new legislation. The United Kingdom has taken the lead by introducing a mandatory cap and trade scheme with the intention of cutting carbon emissions within that country by over 1.2 million tonnes per year in the next decade or so. Only select organizations are affected but those that are must ensure that they understand the implications and fully embrace the body and the spirit of the new law.

The Carbon Reduction Commitment now ensures that larger organizations in the United Kingdom must also be involved in the carbon reduction business. It is estimated that approximately 5,000 organizations must participate and the trigger point refers to the electricity use as measured during 2008. Should an organization utilize half hourly metering and have exceeded 6,000 megawatt hours during that year, then it must participate.

The British government is moving quickly. Once the Climate Change Act received official blessing at the end of 2008, the Carbon Reduction Commitment was rolled out immediately and required organizations to look backward to see if they should comply or not.

As the final details were still being worked out during the course of 2009, organizations were directed to calculate whether they should participate and prepare, if so, to start measuring and reporting early in 2010.

Carbon Reduction Business for Carbon Reduction Commitment

Specifically, and of greatest concern to those in this carbon reduction business, is the fact that during 2011, an organization participating within the CRC will have to be ready to purchase allowances, (including retroactively for 2010) by the beginning of April 2011. This could represent a significant financial consideration and, maybe more importantly, as the government intends to publish a “league table” of performance, reputational benefit or harm can be imagined.

The CRC is likely to be just a harbinger of what is to come, as any organization that is involved in the production of carbon emissions must now be involved in the carbon reduction business comprehensively. There is a lot at stake, but the organization should look at this as a significant opportunity and not as a threat.

Carbon Reduction Business for Potential Revenue Stream

By initiating greater efficiencies throughout the operation, an organization should be able to cut operational costs significantly. The more that the company is able to cut its emissions the more opportunity there is to trade back unused carbon offsets into the wider market. This in itself can create a potential revenue stream. Organizations that are highly efficient will of course avoid significant government imposed financial penalties, but there is greater potential for public relations and marketing capitalization, as an enterprise may get a significant boost in the realm of public opinion.

Within the United States, a similar style of legislation is fully backed by the Obama administration, yet is one of only several contentious major issues facing the legislature in 2009. It is likely that something along this line will eventually be passed, but many eyes are on the UK scheme as it unfolds.

About Verisae

Verisae helps measure, manage and reduce equipment and energy costs including the related business and environmental impacts of carbon emissions. The Sustainability Resource Planning (“SRP”) software platform improves operational efficiency, protects brand integrity and helps ensure regulatory compliance for distributed enterprises across many industries. Verisae delivers a broad range of sustainability solutions to dozens of clients globally with thousands of daily users including an extended network of third-party suppliers. Verisae’s integrated sustainability platform actively tracks millions of assets across thousands of sites worldwide.

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