The Department for Business, Energy and Industrial Strategy is asking businesses and other groups to help shape the new framework.
The government has recently launched a consultation on the future of streamlined energy and carbon reporting.
This is partly in recognition of the complexity created by the wide range of energy efficiency policies currently operating and the confusion it can cause business consumers.
There have already been steps to reshape the rules. Reforms announced in 2015 included the closure of the CRC Energy Efficiency Scheme (in 2019), following complaints of the scheme being too onerous. The original proposal was for the Climate Change Levy to be increased to make up the lost revenue.
Interestingly, the consultation document states in 1.14 that “Mandatory reporting on energy and carbon is not proposed to apply at this time to the public sector”
The recent Energy Savings Opportunity Scheme Interim process and early impact evaluation report issued by BEIS indicated that the ESOS experience has generally been a positive experience for the participants. It is likely that something equivalent would form part of the new framework should the consultation report response allow it.
The proposals are divided between UK quoted companies and UK unquoted companies.
For larger quoted companies in the UK, there remains a mandatory requirement to report annual greenhouse gas emissions (GHGs) and an intensity metric. They should also record and publish all energy use in all areas, via their annual reports.
Companies who are unquoted are being asked if there should be a greater degree of reporting dependent on their size and number of employees (including financial tests), whether they use over a certain amount of energy (6GWh) within a year or have a different threshold of energy use.
These companies would, presuming they pass the qualification threshold, need to report
- Some of their energy use and associated GHG emissions
- An intensity metric – which the guidelines state as “at least one ratio which expresses the reporting company’s annual emissions in relation to a quantifiable factor associated with the company’s activities.”
According to BEIS, smaller companies and groups would potentially be exempt even if they met the 6GWh threshold. Organisations outside the scope of mandatory reporting are being encouraged to participate voluntarily.
Claire Perry MP, the Climate Change and Industry Minister, says this is about encouraging business to improve their energy efficiency.
The message we want businesses to hear is that energy is a controllable cost. There is significant potential for UK businesses to save money, estimated at over £2 billion per year, through improved energy efficiency in buildings and processes.
The government’s impact assessment provides estimates of average annual energy savings, energy cost savings to companies and the change in overall annual administrative burdens on businesses.
Tim Holman, Head of Operations at TEAM, said
Energy & Carbon Reporting is a key to help drive investment in energy saving measures and maintain focus on preserving on-going performances. This consultation is an opportunity to make sure your opinion is heard and that any new reporting requirements are not ‘watered down’ leaving the good work being done to save energy & carbon is no longer recognised or valued.
The consultation is also seeking additional evidence on costs and benefits to business of the proposals, alongside ideas for other methods of reporting which may be introduced in the future.
A special launch event for the strategy is being held at the BEIS Conference Centre in London on the 9th of November, although it has been oversubscribed so additional dates will be added in London and regionally.
The consultation ends at the beginning of January. We will be watching for the outcome and reporting on any new compliance issues.