Carbon Trading, Carbon Tax and the Emissions Trading Scheme
European legislation designed to curb industry’s emissions of Carbon Dioxide, as part of the strategy to limit the damaging effects of Climate Change, are starting to have an impact directly and indirectly on businesses across the continent.
Wholesale electricity prices, as reported in Energy Eye™, have seen sharp rises in the last 2 months. These rises can partly be attributed to the value of European Union Allowances (EUAs) for Phase 2 of the Emissions Trading Scheme, which have also risen over the same period*. Both the level of the increase and the timing show a close correlation between the two markets. This further demonstrates the shift towards a low carbon economic future.
BIU is already helping clients to manage the impact of the power / carbon dynamic, through our EMPIRE Utility and Emissions Management System. In an environment of increasing energy prices, whether from carbon or crude oil, the importance of managing these issues will be vital to the continued success of your business.
The Carbon Reduction Commitment
The UK Government has launched a consultation, through DEFRA, on a new emissions scheme called the Carbon Reduction Commitment. The scheme will apply to large organisations (public and private sector) with an introductory three-year phase commencing 2010. The scheme will be mandatory for all qualifying organisations and aims to reduce carbon emissions through a ‘cap and trade’ scheme.
A number of key elements of the scheme are still subject to consultation. However, the qualification criteria has been set and organisations will be assessed for inclusion in the scheme based on their usage during 2008. All organisation, where their mandatory half hourly metered usage is more than 6,000,000kWh pa, will be required to report on all their carbon emissions: half hourly metered, non half hourly metered and natural gas. Energy intensive organisations covered by the EU ETS will be excluded, together with possible reporting exceptions for organisations’ smallest supplies.
This mandatory scheme, which sets businesses on a reducing carbon emissions path, creates a financial incentive for businesses to invest in infrastructure and projects which result in reduced emissions. For any organisation this commences with creating access to the clearest and most accurate data on current and on-going utility usage and progresses to using this data as the foundation for active, on-going cost, carbon trading and usage management.
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