Carbon Reporting Changes – for the many not the few

The Government has brought in changes to the way certain businesses report their carbon usage. However, these changes will also have a knock on affect on all other UK businesses.

 

What has changed?

Since 2010 approximately 1,200 UK businesses have had to report their annual carbon emissions under the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. The CRC scheme captured the largest energy users in the UK .

The CRC scheme closed in April 2019 only to be replaced by the Streamlined Energy and Carbon Reporting (SECR) scheme.  The new scheme introduced a lower reporting criteria, meaning that an estimated 11,900 companies will now be required to report. 

SECR aims to bring the benefits of carbon and energy reporting to more businesses. The reporting framework is intended to encourage the implementation of energy efficiency measures, leading to both economic and environmental benefits, by encouraging companies to cut costs and improve productivity at the same time as reducing carbon emissions.

 

 Who has to report carbon emissions under SECR?

There are three types of businesses affected by the new regulations. (1) Quoted companies of any size who already have to report under mandatory greenhouse gas regulations. (2) Large unquoted companies and (3) large Limited Liability Partnerships, where “large” is defined as having two of the following three requirements

  • a turnover of £36million or more;
  • a balance sheet of £18million or more; or
  • 250 employees or more.

SECR requires businesses to report their energy usage and carbon emissions within their Annual Accounts, and qualifying businesses have a legal obligation to comply.

 

Why will all UK businesses now be affected?

The ending of the CRC scheme meant that the carbon levies previously being paid have ended. The government has, however, replaced that income by increasing the Climate Change Levy (CCL) that is added to all commercial gas and electricity bills. CCL was increased quite significantly from April 2019.

In doing this the Government have spread the revenue burden across all UK businesses rather than just the largest few. Those businesses previously under CRC will find themselves better off but all others will now be paying more on their energy bills.  

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