Public sector organisations have been widely applauded for taking the lead in many cases on energy efficiency, but there is now a possibility that they may incur penalties when the carbon reduction commitment (CRC) takes effect from April next year.
McKinnon & Clarke, an independent energy and environmental service consultancy, is forecasting 'significant penalties' for public sector organisations when the government's plans are implemented next spring.
The scheme is designed to reward organisations that cut their carbon emissions, but the cconsultancy's energy and environmental manager, Callum Stuart, said the odds are stacked against public sector organisations – many of which have already made significant strides to reduce energy consumption and have little freedom to rationalise significantly their consumption of energy further.
Stuart said: "Public organisations such as hospitals and local authorities have already implemented robust energy-reducing measures, and little more can be achieved without impacting on performance or incurring prohibitive capital overheads.
"Unfortunately past performance is not taken into consideration in CRC targets. Private organisations will typically have more flexibility to rationalise their use for energy through consolidation and restructuring.
"The 5,000 or so UK businesses impacted by the CRC will be scored and placed in a league table, with those demonstrating most success in cutting carbon emissions receiving bonuses and those less successful, penalised."
But Harry Morrison, general manager of the Carbon Trust Standard Company, said that the CRC does recognise past efforts to reduce emissions through the early action metrics, including the Carbon Trust Standard.
"Over 50 public sector organisations, including local authorities and higher education providers, have already shown their leadership in carbon reduction by achieving the Carbon Trust Standard. As a result, these organisations will be placed higher in the CRC league table," he said.
And also claimed that the CRC provides a level playing field for all organisations.
"In our experience, performance is variable in both the public and private sectors. CRC will reward those forward thinking organisations in any sector that are well prepared. It's about putting a carbon management strategy in place that will support carbon reduction in the long-term, in preparation for the CRC and beyond.
"Collectively, achievers of the Carbon Trust Standard have saved over £50 million by reducing their emissions and our analysis shows that both public and private sectors have ongoing opportunities to cut costs through cutting emissions."
With bonuses in year one capped at 10% but rising sharply to 50% in year five, the reality will be that big organisations with a lot to gain will streak ahead and that public-funded organisations will end up paying huge penalties imposed by the government, the consultancy claimed.
Stuart added: "Many businesses have yet to consider the financial implications of this legislation, not to mind setting in place procedures to ensure they comply. The penalty for failing to register is £5,000. We estimate that it will take a minimum of three weeks to undertake the registration process, so organisations need to start planning now to meet the April deadline."
