Businesses face increased pressure to ‘go green’
Manufacturers are facing renewed pressure to further reduce their impact on the environment as new climate change legislation comes in to force.
The new Climate Change Levy Agreement Scheme means companies will have to work harder to achieve carbon emissions reduction targets and pay higher penalties for any failure.
Mike Jones, Managing Director at IEC, said: “For manufacturers, the impact of this new legislation is potentially huge.”
Introduced 10 years ago, the Climate Change Levy (CCL) Agreement Scheme is designed to encourage companies to reduce their impact on the environment.
Members of the scheme can claim a rebate of up to 65% on the tax element of their energy bills in return for meeting agreed emissions reduction targets.
Earlier this year the government renewed its commitment to the CCA and set in place new targets and penalties for the next 10 years. The new targets will mean companies have to work harder to further reduce their emissions. If companies fail to meet their targets they have to purchase carbon, previously priced at around £2 – £3 a tonne, but now quadrupled to £12 per tonne under the new CCA scheme.
Mike said: “The CCA scheme can provide significant savings for companies that actively seek to reduce their environmental impact. However, under the new scheme, the targets will be harder to achieve. And companies that fail to meet their targets will face a significant cost increase if they find they can no longer claim the same level of rebate and have to buy offset carbon at a four times higher price.
“Our region’s manufacturers will be particularly hard-hit because of the energy-hungry nature of their businesses and the pressure they’re already feeling because of the economic downturn.”
