Government's carbon scheme more retail friendly but still some flaws

7 October 2009

The government's latest carbon reduction plans are more business-friendly than earlier proposals but still disappointing in places, said the British Retail Consortium (BRC).

Reacting to the Carbon Reduction Commitment Energy Efficiency Scheme, published today (Wednesday), the BRC said that postponing the requirement for businesses to buy carbon emission allowances by a year would let retailers keep the equivalent of 11,000 retail salaries.

But the retailers' organisation said that retailers who do not own their shops would still be penalised where landlords take no action to improve energy efficiency.

British Retail Consortium business environment director Tom Ironside said: "Retailers have led the way in recognising their responsibilities on climate change. They deserve praise for driving innovation and achieving 17 per cent energy efficiency improvements between 2005 and 2008.

"It's good news that the government's listened to us and recognised that businesses need to hold on to as much working capital as possible as we emerge from the recession and that the first phase of the scheme will be a learning process.

"Agreeing that Year 1 will be reporting only and that allowances only need to be bought from Year 2 will halve retailers' costs in spring 2011 to around £170m – equivalent to over 11,000 retail salaries.

"The retail sector has been a trailblazer in tackling climate change so giving companies more opportunity to demonstrate they have taken action early is welcome but the scheme's details must allow pioneering retailers to get full credit for all they have done.

"It's disappointing that retailers who don't own their stores, so have to switch to green energy rather than invest in improving the energy efficiency of those buildings, will still be penalised. We'll continue to work with the government and landlords' organisations to ensure that the costs and benefits of energy efficiency measures are shared fairly between landlords and their retail tenants."

The BRC's voluntary initiative A Better Retailing Climate – a range of industry-wide environmental commitments made by BRC member retailers in April 2008 - continues to drive improvements throughout retailing.

The Carbon Reduction Commitment will require retailers to trade in the emissions allowances they will have to buy. The more energy efficient will be able to sell their unused allowances and will receive bonus payments under the scheme, increasing incentives to improve efficiency. Retailers are required to pay up-front. They will receive money back after six months when all the sums are done but the scheme will have an impact on cash-flow.

The scheme begins on 1 April 2010 with payments beginning on 1 April 2011.

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