The UK government have announced a new mandatory Streamlined Energy and Carbon Reporting (SECR) framework, a decision which is set to have a huge impact on many large businesses throughout the country.
The new framework is set to replace their outgoing CRC Energy Efficiency Scheme in April of this year, and act as the new guideline for firms to report on their carbon compliance.
SECR will see more businesses being scrutinised on their carbon output than ever before (we’ll touch on ESOS later). If alarm bells aren’t ringing yet, then news of an increase in climate control rates are sure to make many businesses sit up and take note.
With implementation just a few months away (and landing straight after the proposed Brexit date), we’ve addressed some of the last-minute concerns facing UK businesses.
Will the change impact me?
You might think that because the previous scheme didn’t affect you, the new framework is none of your concern. However, new estimates have revealed that many UK firms could be in for a shock. Whilst the previous CRC Energy Efficiency Scheme only applied to 4,000 businesses across the nation, the government believe the new framework could apply to almost 12,000, presenting a whole new challenge (and a lot more paperwork) to those unaffected previously.
SECR will be relevant to companies that fulfil at least two of the following three conditions in the financial year for which they are reporting:
- A minimum of 250 employees;
- Annual turnover greater than £36m; and/or
- Annual balance sheet total exceeding £18m.
Sound like you?
Will the SECR framework see my energy expenditure increase?
Here’s the bad news, the chances are that your extra paperwork is also going to be joined by an increase in your bills. To subsidise the lost income from the outgoing CRC scheme, the government has announced increases in their Climate Control Levy (CCL) rates.
From April 2019, CCL rates will increase by almost 50% for electricity and 70% for gas.
The rate changes of the CCL are as follows:
The levy increase only goes to reinforce a subject we at Great Annual Savings (GAS) feel very passionately about, it’s imperative you have the right energy deal for your business.
I’m already ESOS compliant, will the changes still affect me?
With a very similar level of criteria, there’s a high likelihood that most organisations who have had to submit a return for the Energy Saving Opportunities Scheme (ESOS) will be required to report to the new scheme.
Both schemes are compulsory, especially ESOS, in which non-compliance can result in fines up to £50,000.
The UK government has expressed that it intends to revisit how the SECR framework will work alongside ESOS once it’s evaluated the impact and effectiveness of the first phase of ESOS.
What information do I need to report?
From April 2019, you will be required to include details in your annual Director’s Report on your overall energy use, carbon emissions and any energy efficiency actions you have implemented. The report should include your standard scope 1 (Fuel combustion, Company vehicles, Fugitive emissions) and Scope 2 (Purchased electricity, heat and steam) emissions.
The SECR legislation will introduce a third scope into the mix, including all transport (road, rail, air and shipping) and UK electricity and gas.
If your business is registered in the UK, you will still be required to report on your global energy use and carbon emissions.
With such a drastic change on the horizon, there are no shortcuts or quick fixes.
Moving forward, it’s vital you develop an overall energy strategy covering all areas, including usage, carbon output and procurement.
Here at GAS, we’re on hand to support you every step of the way. With a highly qualified in-house energy management team, we can aid you in implementing comprehensive energy saving measures designed to minimise and control not only your current consumption, but also your overall carbon emissions.
Our team of procurement specialists are positioned to protect you against rising CCL rates by ensuring you get the energy deal that best fits your business model.
To speak with an advisor, call us on 0800 130 3514, or book a free consultation with our team via our contact form.