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Update on Government's low carbon scheme for SMEs

Energy and Climate Change Secretary Ed Miliband has called for businesses to take advantage of the £100 million on offer to help small and medium businesses become more energy efficient over the next two years.

He said: Businesses in every corner of Britain can now improve their energy efficiency and make real savings on their energy bills at a time when every penny counts. British business is a global leader in the low carbon sector, but we must work hard to retain that leadership and realise the benefits of developing more sustainable business practices and low carbon technology.

The initiative to offer interest-free loans to small and medium enterprises is an existing scheme run by the Carbon Trust. The funding top-up will expand the scheme three-fold.

Carbon Trust chief executive Tom Delay said: The additional funding of the Carbon Trust scheme means many more companies can take advantage of reducing costs by up to 20 per cent, while also helping to reduce carbon emissions. We urge UK businesses to prioritise action on carbon reduction.

However, the total loan distributed will be based on projected CO2 savings, so for each £1,000 borrowed a business must be able to reduce their carbon dioxide emissions by two tonnes. The minimum loan available is £5,000 meaning that an SME must save at least 10 tonnes of CO2.
The maximum amount a company can borrow is £200,000, which would mean having to save 400,000 tonnes of CO2.

Federation for Small Businesses chairman of environment John Holbrow said: It may be difficult for a small business to save 10 tonnes of CO2 in order to receive the minimum loan.
He also added that many of his members had not realised the scheme has already started. He said: Its disappointing that more publicity has not been given to the scheme. It would have been helpful to have been made aware of it having started.

A company will only qualify for the low carbon scheme if the estimated CO2 savings cover the cost of the loan within five years.

Case Study

In March 2009 Express Engineering used an interest-free loan to revise skip procedures by using an extra skip for recyclables. Additionally, they purchased green bins and also recycle all plastic cups. The polystyrene that packaged their products is also now being reused into the companys own packaging. This has cut the firms packaging costs by 50 per cent.


 

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