Consultancy Warns Large U.K. Companies to Start Measuring CO2

• 

  Your Email: *

  Your Name: *

  Send To: *

  Enter multiple addresses on separate lines or separate them with commas.

  You are going to email the following: Consultancy Warns Large U.K. Companies to Start Measuring CO2

  Message Subject: (Your Name) has forwarded a page to you from GreenBiz.com®

  Message Body: (Your Name) thought you would like to see this page from GreenBiz.com®.

  Your Personal Message: *
  
• 
• 
• 

LONDON, UK -- Accounting and consulting firm KPMG is warning United Kingdom businesses to begin examining their carbon emissions ahead of a new mandatory carbon trading program launching in late 2009.

If they don't, they could face cash flow issues when they go to purchase emissions allowances for the Carbon Reduction Commitment (CRC). Companies that take early steps to minimize reductions will reap rewards of rebates and public praise, KPMG said.

Many large organizations not covered by the European Union Emissions Trading Scheme will be included in the (CRC). The cap-and-trade will be mandatory and cover up to 10,000 entities that spend more than £500,000 (about US $930,000) on electricity annually, such as supermarket and hotel chains, government departments, banks and cinemas.

"Companies that operate across multiple sites, or that have franchises, or groups of companies in private equity ownership -- for all of these, measurement will not be straightforward or easy," said Richard Sharman, KPMG's carbon advisory group head. "It is vital that companies start to look at this now so that they are ready for the scheme's introduction -- and so that they can take action if they fear they may come out towards the bottom of the pile."

KPMG estimates that organizations under the scheme could spend at least £38,000 (roughly US $70,750) a year on allowances -- with most paying more. During the scheme's first phase from 2010 to 2013, KPMG predicts carbon dioxide to command £12 (about US $22) per tonne. The non-compliance penalty is £25 (about US $46.50) per tonne, and will rise to £75 per tonne in 2013 (about US $140).

Formal emissions measurement will begin on October 2009 but 2008 electricity will determine qualification.

The government will publicly praise the best performers and shame the laggards in a league table, which could result in a "public relations disaster," KPMG said. Organizations is a high position in the table will receive rebates from the scheme. But the rebates may not arrive until after the allowances are purchased which could put a damper on cash flow.

"Companies that get it right will be directly rewarded for improved energy efficiency," Sharman said. "Companies that get it wrong, however, could find themselves paying more as well as suffering a reputational impact. With the new regulation requiring detailed calculation and reporting of carbon emissions from as early as autumn next year, companies need to switch on to the issue as soon as possible."

Share: LinkedIn   StumbleUpon   Digg

Post a Comment »