Firms not ready for CRC, says research

The CRC will apply to most schools and hospitals

Although new climate legislation means the energy costs of more than 5,000 large UK organisations will rise by at least £55,000 next year, only about a third have started making preparations to cope with the change.

To make matters worse, according to a survey undertaken by commercial insurance and energy management company RSA, less than half of businesses are aware of the existence of the Carbon Reduction Commitment (CRC), while three-quarters are unsure when comes into force.

Alex Matthias, energy management leader at RSA, said: “CRC will be an important issue for many years to come and it is vital that organisations take advantage of the potential financial benefits by acting now rather than leaving it to the last minute and risking their company’s reputation and bottom line.”

The CRC will require both private and public sector organisations that consume more than 6,000MWh of electricity per half hour to purchase allowances for every ton of carbon dioxide that they emit.

The allowances are estimated to amount to about six per cent of each enterprise’s current energy expenditure, but administration costs are also expected to account for an additional five per cent.

This means that, if an organisation’s annual energy bill is £500,000, it will have to spend a further £30,000 on purchasing the allowances and another £25,000 on achieving compliance.

A public league table will be set up to rank individual enterprise performance based on energy use and organisations will be either rewarded or penalised based on their chart position.

However, just under 60 per cent of those surveyed have yet to start making preparations.