Time is running out for CRC laggards

Writing as someone whose tax return is invariably filed hours rather than weeks before the deadline, I have plenty of sympathy for those businesses yet to officially register their inclusion in the Carbon Reduction Commitment (CRC) scheme.

The entirely human instinct to put off something you can do today until the last conceivable moment means it is not surprising that barely a third of the organisations covered by the CRC have lodged their registration documents with the Environment Agency.

Whitehall insiders insist they are not yet worried about the relatively low levels of registration, predicting that a flurry of businesses and public sector bodies will get their documents in during the last two weeks before the deadline. The Environment Agency has undertaken this type of registration procedures in the past, they say, and people always wait until the last moment to comply.

The temptation for many businesses will be to join these last-minute deadline surfers and wait until September to complete the necessary registration forms and send them to the Environment Agency.

But, just as with tax returns, there is a strong case to be made for getting the task completed sooner rather than later, particularly when there are just 50 days to go until the deadline.

Registering with the CRC is not that difficult, but it is likely to take longer than many firms expect.

Organisations need to work out whether they use more than 6,000 MW hours (MWh) and qualify as a full participant of the scheme or an information declarer and whether they are registering their involvement as a standalone company or part of a larger group. They also need to decide who will act as the senior officer responsible for CRC compliance, and work out if they are eligible for any exemptions from the CRC. Those companies that leave registration until the last minute could find that they struggle to lay their hands on the necessary information quickly enough.

In addition, laggards diminish the chances of working with the Environment Agency to put right any errors in their registration. The agency is likely to be flooded with registrations over the next few weeks – some estimates suggest the rate of registrations will have to increase around five-fold if all organisations are to register in time – and as a result it will inevitably struggle to provide constructive feedback to each and every company that files an incomplete registration document in the hours before the deadline. As the agency itself notes on its web site: "The earlier an organisation registers with us, the more time we have to work with them to check and correct any errors".

The government has said it does not want to fine anyone for breaching the CRC deadline and is bound to be understanding with those organisations that clearly make an effort to get their registration in on time.

But at the same time DECC and the Environment Agency cannot let the credibility of the scheme be compromised at such an early stage and if, as a recent report from consultancy WSP Environment and Energy suggested, up to 7,000 organisations miss the deadline, the pressure will increase to start dishing out fines.

Penalties for missing the deadline start from as little as £500 and are capped at £45,000 for the worst offenders – sums that are unlikely to be a cause of great concern for some of the large multinationals covered by the CRC. However, the Environment Agency has said it will name and shame those organisations that repeatedly fail to register with the scheme and will also reserve a special place for them at the bottom of the CRC scheme's annual energy-efficiency performance league table. There is a reputational, as well as a financial, reason to meet the September deadline.

The CRC has been widely promoted, and, as energy and climate change minister Greg Barker observed today, it remains central to the government's emission reduction plans. Those businesses that fail to comply with the scheme or try and plead ignorance when they miss the deadline will be given short shrift.

The time for excuses is over and the onus is now on all large energy consumers in the UK to stop sitting on their hands and register for the scheme. Then, and only then, can they get on with the real purpose of the CRC and start working out how they are going to cut their energy use.