Waste management firms Sita, Shanks and Veolia Environmental Services are among around 23 waste and water companies which will be obligated to reduce their carbon dioxide emissions each year from 2013.
Those groups which will need to report their emissions are non-energy intensive organisations, which use at least 6,000MWh of half-hourly metered electricity equivalent to £500,000-worth. It is expected that more than 20,000 organisations will have to register to do this. A further 15,000 organisations which use less than 6,000MWh but still have a half-hourly electricity meter will also have to register and declare their energy use.
Organisations will have to buy unlimited allowances for every tonne of CO2 they emit. During the introductory phase these will be sold at a fixed price of £12 per tonne.
Environment Agency head of climate change Malcolm Fergusson explained: [From 2013] we enter a full cap and trading scheme where there will be a fixed number of allowances, and that will decline year on year. So if people dont reduce their emissions in line with the cap, [they will have to pay for more allowances] so it would cost more to do it but equally there will be more incentive to reduce your emissions.
All money raised from allowances will be redistributed back to participants according to their energy performance. A league table charting the best and worst achievers will be created from results, which will be available for public viewing online.
Organisations should also see cost-savings through reducing their energy bills.
Fergusson added: The waste sector thinks about materials and recycling, but do they think about energy as a component of that? I must admit I dont know but well find out, I suppose.
Regarding the interplay between carbon and materials recycling, its not straightforward what the best way is sometimes, so we need to bring carbon savings into that.
Shanks is in the process of setting up a working group to deal with its CRC obligations. A spokesman said: We welcome the scheme and recognise that carbon reduction is important, and there is a need to do something about it. However, there is an unintended negative impact on our industry because we need to use energy to recycle and recover. By its very nature, recycling and recovery uses more energy than putting it into a hole in the ground.
The Carbon Trust is advising organisations to reduce electricity consumption through simple measures such as turning off lights when no-one is in a room, switching off computers and efficiently using heat. For example, where there is process heat through manufacturing, organisations should utilise this energy.