Carbon emissions will assume an even higher profile once the Climate Change Bill becomes law and the Carbon Reduction Commitment (CRC) is introduced.
Current proposals would make it essential for processors to manage their footprint. "The government is widening the scope of regulation of carbon emissions and this will affect a whole new tier of organisations," says Becky Warren, solicitor in Eversheds' Clean Energy and Sustainability team.
If companies, including subsidiaries, use more than 6,000MW hours of electricity, measured by half-hourly meters, they will be obliged to register with the Environment Agency that they are a CRC organisation by June 2009. Not doing so is likely to be an offence under the CRC Regulations, which are currently being drafted. The proposed penalty would be a fine per tonne of carbon dioxide emitted and the organisation would be publicly identified. Those that pass the 6,000MW threshold, but are covered by the UK Climate Change Sector Agreement (CCA), may apply for exemption from the CRC. However, this will depend on how much energy use is covered by the CCA.
Firms using under 6,000MW hours will not be covered by the CRC, but the government has said that this threshold may be lowered.
"This is going to cause organisations covered by CRC to really think about whether they can cost effectively reduce their emissions and the level of carbon allowances they will need to cover their carbon emissions," says Warren. Companies must determine what their carbon footprint is, who will be responsible for managing it and their energy consumption, and whether those individuals need further training regarding carbon trading. They must also identify where energy savings and carbon reductions could be made.
Organisations wanting more information can consult law firms, environmental consultants and the Department for Environment, Food and Rural Affairs website, says Warren.