CRC will cost more than you think says carbon reporting expert
Fines and costs from the Carbon Reduction Commitment (CRC) deadline will hit sooner than expected according to leading accountants.
Henry Le Fleming, carbon reporting specialist at PricewaterhouseCoopers (PwC) warned businesses yesterday (15 August) they have only four weeks to sign up and avoid extra costs.
So far only about 1200 firms of the estimated 4000 businesses in the UK have signed up with the Environment Agency for the scheme which has a deadline of September 30.
However, Mr Le Fleming believes the September 30 deadline is misleading and firms need to register well before then to avoid fines and other costs, he said: "Registration is a more pressing issue than many businesses think.
"Companies need to allow between two and four weeks for the Environment Agency to run checks, including anti-money laundering for company's senior officers referred to in the process.
"In reality the deadline is September 2 for most companies. Companies cannot afford to leave registration until the last minute.
"They need to start moving on the process, and fast, otherwise they face significant fines.
"Missing the deadline will cost £5000 and incur an additional charge of £500 per day, up to a maximum of £45,000. There's also potential reputational damage from a company being listed as non-compliant."
Analysis by PwC at the launch of the scheme found that companies could be underestimating the impact of CRC regulations, illustrating that the scheme could add more than 4% to 6% to energy costs in 2011 depending on the size of a company's energy bills.
A long term scenario demonstrated that poor performers with an energy bill of £1m could face an additional £500,000 costs on top of their energy bill over the next five years. By 2015, this could equate to around an additional 20% on the energy bill each year.
But companies who plan ahead and perform well could turn an early loss into a gain, seeing their energy costs reduced by over 8% in 2015.
For a company with a total energy bill of £1 million, this would be worth just over £85,000 in 2015 alone, or £150,000 over the course of the next five years.