Government response to Streamlined Energy and Carbon Reporting consultation

Monday 23rd July 2018

Nobody likes uncertainty, which is why E2 have been anticipating today’s publication of the Government Response to the Streamlined Energy and Carbon Reporting consultation.

Since the 2016 Budget we have known that an increase in CCL from April 2019 will replace the monetary aspect of the CRC (Carbon Reduction Commitment) scheme. CRC reporting will be abolished after the 2018/19 CRC year, but we couldn’t advise our customers what would replace it.  We garnered some clues from the consultation last year, but couldn’t say with certainty who would qualify and what the reporting requirements would be.

We can now say for certain that the following companies will qualify:

  • Quoted companies
  • Large incorporated unquoted companies  (>250 employees OR turnover >£36m AND balance sheet of <£18m)
  • Large LLPs
  • Unregistered companies that are required to prepare a Directors Report

There will be an exemption for companies that confirm that they have low energy use.

The reporting will be based broadly on the existing greenhouse gas mandatory reporting requirements for quoted companies.  Plus a further requirement to report global energy use, as well as carbon emissions, and provide a narrative on energy efficiency action.

For UK incorporated unquoted companies, who have not had to report on greenhouse gases before, the requirements are as follows:

  • UK scope 1 and 2 carbon emissions
  • UK energy (including as a minimum electricity, gas and transport (transport defined as road, rail, air and shipping))
  • Relative emissions incorporating an intensity factor (left to sectors, best practice and the guidance to specify the most appropriate metric)
  • Voluntary reporting of UK scope 3 carbon emissions
  • A narrative on energy efficiency action over the year

Within the report there is also endorsement of the recommendations from the Taskforce on Climate related Financial Disclosures, for example inclusion of climate/energy/carbon risks and any mitigation or adaptation within Strategic Reports.  This is not mandated at this point, but does offer clues on the direction of future updates to the scheme.

Reporting will be annually, filed with Companies House in Director’s Reports.  Electronic reporting of the information will be voluntary from 2019, with mandatory electronic reporting left open as an option in future years, likely to be introduced with other electronic reporting requirements to Companies House.  As such there will be no centralised database or location of company’s energy and carbon emissions data straightaway, but it is likely that this will be developed.

If you would like to talk to us about whether you qualify, any exemptions or what type of data you should be collecting in preparation, please get in touch at [email protected].

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