The carbon reduction commitment
Is the Technology industry prepared for carbon trading?
In April 2010, the Carbon Reduction Energy Efficiency Scheme (CRCEES) comes into effect. The Carbon Reduction Commitment (CRC) is a mandatory cap and trade scheme for non transport CO2 emissions from UK organisations. The scheme targets large, non-energy intensive energy users - the government believes 5,000 of the UK's largest organisations including many technology companies will be affected.
It provides an incentive to reduce CO2 emissions by distributing some of the revenue from the worst to the best performers.
There will be a significant cost for organisations with poor performance - in the worst case the CRC could add 30% to energy costs by 2015.
However, the best performers will receive a cash benefit.
The obligation will fall on parent organisations, not entities or sites. Private Equity funds could be responsible for emissions from their portfolio.
The regulations are complex and there are significant penalties if companies get it wrong.
The technology sector's sustainability profile is a double-edged sword. On one hand, the sector holds great promise in terms of changing society's patterns of travel and communication (and therefore) energy consumption), and bringing economic and social development to disadvantaged people. On the other hand, short product cycles lead to high disposability, electronics often consume considerable energy in the home even when not in use, and manufacturing processes are often resource intensive.
We have a carbon Markets team that has been advising clients on carbon markets since inception. Our services for CRC include: preparation for the regulations; assessment and management of the financial impact and providing assurance and financial advice on the accounting and tax implications.
