Large companies to be told to get energy efficient

While the EU's Emissions Trading System encourages energy-intensive industry to tackle its carbon output, there are relatively few incentives to persuade other large organisations to do the same.

Speaking at the Environmental Industries Commission national conference last week, Environment secretary David Miliband said Government was looking at ways to address this issue and would be considering putting measures in place to achieve major emissions reductions by supermarkets, hotel chains, large local authorities, universities, office blocks and other significant polluters.

Defra has launched a consultation, said the Minister, looking into the most cost effective way of make major emissions reductions in the sector, which is made up of something in the region of 5,000 public and private sector organisations.

Together those organisations emit around 15 million tonnes of carbon a year and Government wants to see that cut by 1.2 million tonnes by 2020.

The new measures, once introduced, would cover organisations using more than 300Mwh annually – roughly equivalent to an annual energy bill of £250,000.

“This group of organisations create around 10% of the UK’s emissions, and they have a vital role in reducing the carbon dioxide emissions that contribute to dangerous climate change. Doing nothing is not an option,” said Mr Miliband.

“We made a clear commitment in the Energy Review to reduce emissions from these organisations by 1.2 million tonnes of carbon a year by 2020, and corporate leaders have called for us to develop strong new policy instruments to focus on this sector.

“We’re asking for their thoughts, and the thoughts of the wider community, on what those instruments should be.”

Proposals on the table include a mandatory cap-and-trade system akin to the ETS, called the Energy Performance Commitment (EPC), voluntary bench marking and reporting to encourage businesses to perform well to protect their reputation, changes to building regulations requiring further energy efficiency measures, easier access to advice for industry and industry-led agreements to reduce its emissions.

“These policies, alone or in combination, have the potential to help us reduce carbon emissions in the UK by more than a million tonnes by 2020, representing savings for the businesses themselves as well as for the environment,” said Mr Miliband.

“It’s a fallacy that mandatory emissions reductions automatically mean higher bills for consumers. Improving energy efficiency means savings for business as well as for the environment. Our analysis is that a scheme like the Energy Performance Commitment would deliver £965 million in overall net benefits to participants through lower energy bills.”

Energy Minister Malcolm Wicks said: “The Energy Review and more recently Stern made clear that establishing a price for carbon is central to how we incentivise industry to change behaviour and develop innovative technologies to fight climate change.

“We are fully behind developing the EU Emissions Trading Scheme which covers some of our most polluting industries, but this consultation recognises the huge potential to reduce emissions from large non-energy intensive organisations like supermarkets, hotel chains, central government departments and large local authorities.”

Sam Bond

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