Gov’s energy audit proposal risks becoming inneffective ‘cost burden’ for business

The Government's proposed Energy Savings Opportunity Scheme (ESOS) will end up a "major cost burden for business" if key lessons from the Carbon Reduction Commitment (CRC) scheme are not taken into account, says Ricardo-AEA's Christine St John Cox.

Although ESOS will require businesses to undertake energy efficiency audits, it will not compel them to act upon any of the potential savings they identify, says St John Cox.

She added that experience of business engagement with the CRC scheme shows that the 7300 companies affected by ESOS could spend more than £100m over 15 years on complying without “generating any significant benefits”.

Sustainability consultancy Ricardo-AEA claims that evidence from the first CRC league table published in 2011 demonstrates that less than 25% of participating companies took full advantage of the scheme by covering a high percentage of emissions with accreditation for carbon reduction and automatic metering.

St John Cox said: “We’re concerned that companies taking a ‘make do’ approach to the legislation will incur the scheme costs, estimated to average £10,000-17,000 for each business audit cycle, without any financial gain”.

ESOS is the Government’s approach to implementing Article 8 of the EU Energy Efficiency Directive, which requires all Member States to introduce a programme of regular energy audits for ‘large enterprises’.

The CRC Energy Efficiency Scheme started in April 2010 and was designed to encourage large public and private sector organisations to reduce their carbon dioxide emissions through energy efficiency.

The CRC went through a review which resulted in the scheme being simplified after industry criticised it for being too complicated. Slammed for its “ineffectiveness”, industry organisations called for the scheme to be scrapped altogether, labelling it an “overcomplicated tax”.

Leigh Stringer

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