I reported back in July that the registration for the UK’s CRC Energy Efficiency (cap-and-trade) legislation was progressing very slowly – see here for the background and its implications for the ICT industry. The Environment Agency, which is running the scheme, had forecast that around 20,000 companies would need to disclose their energy use and 5,000 would need to join the scheme.
The registration process runs to the end of September, but at the end of June just 2,983 companies had made an information declaration and 522 companies had registered as CRC participants. Since then I’ve been tracking the numbers – the list of registrations is updated each week on the Environment Agency web site – and it hasn’t got much better.
The number of declarers seems to be accelerating, but there’s still a long way to go to reach the predicted 20,000 mark. The process is quite quick, so it may well speed up further after the holiday season. But the more complex procedure of registering as a participant is very unlikely to reach the predicted 5,000 figure in time. (At the current rate participants and declarers won’t all be on the register before January and March 2011 respectively).
In fact Henry Le Fleming, carbon reporting specialist at PricewaterhouseCoopers LLP (PwC) has warned that the deadline is actually closer than that. "The final deadline for registration (as a participant) is September 30th but the process needs to start much earlier. Companies need to allow between two and four weeks for the Environment Agency to run checks, including anti-money laundering for company’s senior officers referred to in the process. In reality the deadline is September 2nd for most companies”.
The Environment Agency seems to be trying to avoid embarrassment over the issue. According to BusinessGreen reported a couple of weeks ago, The Environment Agency has written to organisations urging them to register even if their data is incomplete or inaccurate data; "We will work with you to resolve any errors in the information you supply. This will not affect your compliance."
The bottom line is, though, that those organisations that don’t declare their electricity use in time face a fine of £500 for each half-hourly electricity meter they fail to declare. For prospective scheme participants the penalties are a lot higher - £5,000 plus £500 a day until they do register (up to a maximum of £45,000).
But that’s not all. There’s also potential reputational damage from a company being listed as non-compliant and included at the bottom of the CRC scheme annual league table.
It’s going to be interesting to see how this pans out, but there’s clearly been a significant underestimation of the need for information and education to get the CRC message across. I was predicting a rush in the take-up of carbon management software in the run up to the start of the scheme in September, but it looks like it’s going to be a longer, slower process as companies belatedly wake up to the requirement.