Many businesses have already started preparing and implementing policies aimed at improving the energy efficiency of their buildings. Have you? Some of the measures are as simple as replacing light bulbs and adjusting the thermostat. The best starting point for advice and ideas is at www.carbontrust.co.uk, particularly its Good Practice Guide GPG367.
It is not just general public pressure which is moving this issue up the agenda. The government has proposed a mandatory tradeable emissions allowance system for large, nonenergy intensive businesses and public sector organisations. This includes supermarkets, large offices, hotel chains, cinema operators, fitness centre chains, hospitals and universities, any of which have an annual electricity bill above £250k.
Will the proposals affect you? Unless you are one of the estimated 5,000 or so qualifying organisations they will not affect you directly … yet. However, there could be a trickle down effect through the market as large property organisations raise the energy efficiency bar. Also, although the proposals are currently only at the consultation stage, there must be at least a possibility that in the future the £250k threshold will be lowered so as to cover more organisations.
The cap-and-trade scheme under consultation would require participating organisations to buy allowances of emissions at auction or from each other. No figures are available yet but for comparison the cost of an EU Emissions Trading Scheme allowance is around £10 per tonne of carbon dioxide and the average lawyer produces 4.5 to 6.5 tonnes (as well as a lot of hot air!). The revenue gained from the auction would then be recycled by direct payments from the government to participants so that organisations which reduce their emissions and improve their buildings’ energy efficiency will be better off than those whose emissions remain the same. The scheme would be broadly revenue neutral to the government.
The Energy Performance Commitment would supplement various other current and proposed schemes aimed at improving the energy efficiency of buildings. The most significant will be Energy Performance Certificates (EPCs). The EU Energy Performance in Buildings Directive 2002 requires that EPCs no more than 10 years old must be produced whenever a building is constructed, sold or rented. EPCs must also be displayed in large buildings occupied by public authorities or regularly visited by the public. The EPC requirements have been partly implemented into UK law through the Home Information Pack Regulations 2006. From 1 June 2007 sellers will be required to include EPCs whenever a residential property is sold, rating them on a scale from A to G. The EPC requirements in respect of lettings and in relation to commercial properties have not yet been implemented into UK law. The deadline for implementation was 4 January 2006 and the European Commission is therefore considering taking legal action against the UK.