A white paper launched by energy supplier npower yesterday is urging UK businesses to act now on reducing emissions.

UK Climate Policy for Business, commissioned by npower from the London School of Economics, gives businesses a guide to current and forthcoming legislation in Europe and the UK and offers advice on what actions they should be taking.

“Whether or not you believe in climate change, you have to believe in climate change legislation,” says author of the paper, Samuel Fankhauser.

While companies will have to take action to meet new UK regulations such as the Carbon Reduction Commitment (CRC), early adopters will be best placed to take advantage of new opportunities as they arise, says Fankhauser.

The CRC is designed to complement the EU Emissions Trading Scheme (ETS), which came into force in 2005 aimed at managing emissions from the region’s largest emitters of greenhouse gases such as combustion plants, oil refineries and steel plants.

To tackle emissions from the service sector, the UK Government has enacted the CRC. This trading scheme will come into force in 2010 and will cover all organisations that consume more than 6000 MWh per year (i.e. have an annual electricity bill of over £500,000).

Organisations like supermarkets, banks, hotels and other retailers will have to purchase emissions allowances to equivalent to their electricity consumption. The revenue-neutral scheme will plough proceeds from the sale of allowances back to the participating organisations.

But – and here is the crux of the scheme – the amount that an organisation receives back will depend on its performance in reducing emissions, determined by its position in a league table of al participants.

The white paper underlines the fact that the new policy is designed to reward companies that adopt low-carbon measures, cut costs and reduce emissions.

“Reducing a firm’s carbon footprint can be a challenge, but the measures needed are often cash-flow positive, with investment recouped over in a short period of time,” says Fankhauser.

npower advises companies to talk to their energy suppliers now to find ways of reducing energy consumption and make sure that the issue is on the agenda at the highest management levels.

“These are challenging times for businesses,” says David Titterton of npower. “But putting in place an energy management programme to reduce consumption can help manage costs, while also reducing emissions.”

For further information:
www.npower.com/businessenergy
www.defra.gov.uk/environment/climatechange/uk/business/crc/index.htm
ec.europa.eu/environment/climat/emission/index_en.htm