Compliance & Accreditation

SECR – Streamlined Energy & Carbon Reporting

The Streamlined Energy & Carbon Reporting framework relating to public disclosure of carbon and energy use will apply to all quoted companies and large UK incorporated unquoted companies. The reporting framework follows the closure of the CRC Energy Efficiency Scheme and applies throughout the UK and is likely to impact nearly 12,000 businesses.

The purpose of Streamlined Energy & Carbon Reporting is for organisations to get clear visibility of their energy use and emissions and provides the right data to be able to adopt energy efficiency measures to reduce their impact on climate change.

Your business will need to report, as of April 2019 if:

• You are a UK Quoted Company listed on the main market of the London Stock Exchange; a European Economic Area; or is admitted to dealing on the New York Stock Exchange or NASDAQ
• You are a large UK company or Large LLP as defined by the Companies Act 2006 (Turnover £36million or more, balance sheet £18million or more, number of employees 250 or more)

What does Reporting include?

Quoted Companies:

• Report on your total annual global energy use and global emissions (Scope 1 & 2 emissions)
• Publish an intensity metric within the annual report
• Report on any energy efficiency measures put in place within the company.
• Previous years energy use and GHG emissions (except in the first year)
• Methodologies used in calculation of disclosures

Large UK Companies & LLPs:

• Report on your total UK annual energy use and associated emissions (Scope 1, 2 & 3* emissions)
• Publish an intensity metric within the annual report
• Report on any energy efficiency measures put in place within the company.
• Previous years energy use and GHG emissions (except in the first year)
• Methodologies used in calculation of disclosures

*Scope 3 emissions associated to business travel in rental cars or employee-owned vehicles where they are responsible for purchasing fuel.  Other Scope 3 emissions are voluntary.

Who is exempt from SECR?

• The introduction of a formal statutory de-minimis threshold set at 40,000 kWh per annum exempts companies with energy usage below the threshold from reporting.
• An exemption to SECR reporting would also apply to those unquoted companies where it would not be practical to obtain some or all of the SECR information.

Is there a deadline?

• Businesses will be required to implement SECR for financial years beginning on or after 1^st April 2019, reporting deadlines will depend on your current Financial Reporting period:

Is the Scheme Enforced?

The Conduct Committee of the Financial Reporting Council is responsible for monitoring compliance of company reports and accounts with relevant reporting requirements, the Conduct Committee can:

• Enquire into cases where it appears that relevant disclosures have not been provided
• Apply to the court for a declaration that the annual report of accounts do not comply with the requirements

ESOS – Energy Savings Opportunity Scheme

Phase 3

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment and energy saving identification scheme for large undertakings (and their corporate groups). The scheme applies throughout the UK and is likely to impact 10,000 businesses.

Your business will be affected, if on the 31st December 2022:

• You employ 250 people or more
• You have an annual turnover greater than €50m and a balance sheet exceeding €43m
• You are part of a corporate group which includes a UK based large undertaking

Key ESOS Requirements:

• You need to measure your total energy consumption.
• Conduct a proportionate number of energy audits to identify cost effective energy efficiency recommendations.
• Report compliance to the Environment Agency.

Who is exempt from ESOS?

• SME’s, franchisees and public sector bodies are not required to participate in ESOS, however they could still benefit from voluntarily meeting the ESOS requirements.
• ESOS provides a framework you may wish to use to help you identify energy efficiency opportunities, e.g. you may wish to use a qualified ESOS Lead Assessor to undertake energy audits of your operations.

What does an Energy Audit include?

• You will need to consider your organisations entire energy usage – buildings, transport and both industrial and commercial processes.
• Once the overall energy consumption has been identified, 10% (de minimis) can be excluded.
• An ESOS audit must be carried out or overseen by a recognised Lead Assessor and reviewed by a board level Director.

What are the Benefits of ESOS Audit?

• An ESOS audit can help you to identify cost effective energy savings and enhance your profitability and competitiveness.
• By implementing energy efficiencies will also help in reducing your carbon emissions

Is there a deadline?

• Yes, for the third compliance period audits and ESOS activity needs to be completed by 5th December 2023. Thereafter, repeated every 4 years.

Is the Scheme Enforced?

• Yes, there are various penalties that can be applied.
• Depending upon the type of breach these can range from defaulting companies being publicly listed, through fixed penalties ranging from £5,000 to £50,000, with a further £500/ day for late submissions.

Phase 2

If you think you were required to have complied with the second phase of ESOS (which should have been completed and reported to the Environment Agency by 5th December 2019) please get in touch as we can still support you in completing the required ESOS assessments.

CCA – Climate Change Agreement

CCAs are voluntary agreements made between UK industry and the government’s Environment Agency, aimed at reducing energy usage and carbon dioxide emissions. CCA’s were established to enable eligible energy-intensive sectors such as manufacturing to reduce the cost of the Climate Change Levy (CCL), a standing charge on energy and gas bills, in return for committing to pre-determined energy efficiency targets.

CCAs are available for a range of energy intensity industry types such as agriculture, manufacturing and engineering.  Organisations holding a CCA can reduce Climate Change Levy costs by 92% on electricity bills and 81% on gas and other fuels.

CCA scheme extended until March 2025

On the 16^th April this year, the BEIS launched a consultation that set out the Governments proposals for extending the current Climate Change Agreements (CCA) scheme a further two years to March 2025 and would be re-opened to new entrants for a set period.

The Government sought views on these potential reforms and received 101 responses, highlighting the strong interest of businesses and other stakeholders in this area.  These are some of the decisions made by the Government following the consultation:

• Extended Target Periods (to December 22) and Certification Dates (to March 25)

• New entrants will be allowed to apply to join existing sector agreements. The deadline for applications is extended to 30 November 2020.
• The baseline period is to be updated. Where discrete data for 2018 is not currently available, appropriately adjusted Target Period 3 (covering 2017 and 2018) data may be used instead to estimate a 2018 baseline.
• The process for agreeing sectoral targets will remain as proposed, although, where required, we have extended the deadline for counter proposals up to 30 October 2020 at the request of sector associations.
• We acknowledge the views on the potential reform were there to be a future CCA scheme. The Government will look to confirm a timeline for further engagement on the future of the CCA scheme shortly.

Our expert team including Carbon Consultants and highly experienced Data Analysts work alongside Consultus clients to develop a robust CCA application, which is then submitted to the Environment Agency. Following approval of an application, our team then completes and submits the forms required to enable relief on CCL charges.

CHPQA – Combined Heat and Power Quality Assurance

The CHP Quality Assurance programme (CHPQA) is a voluntary scheme designed to provide a practical method to assess all types and sizes of Combined Heat and Power (CHP) schemes in the UK. The simultaneous generation of heat and power in a single process is one of the most cost-effective ways to make carbon savings, and is seen to play plays a key role in environmental programmes. CHP schemes are assessed on the basis of their energy efficiency and environmental performance, ensuring the associated fiscal benefits are in line with real-life environmental performance. Our expert team supports clients in achieving successful CHPQA certification, from programme registration onwards. This grants eligibility to a range of benefits including Renewable Obligation Certificates, Renewable Heat Incentive, Carbon Price Floor (heat) relief, Climate Change Levy (CCL) exemption, Enhanced Capital Allowances and preferential Business Rates.

EU ETS – European Union Emissions Trading System

The EU ETS was the world’s first major carbon market and still its largest. Consultus expertise can help to ensure that organisations can engage with the system in the most effective and focused ways. Now in its third phase (2013-2020), the system is intended to ensure carbon emissions are cut where it costs the least to do so, with a robust carbon price promoting investment in cleaner low-carbon technologies. EU ETS works on the cap and trade principle. A cap is set on the total amount of certain greenhouse gases that can be emitted, which is reduced over time so total emissions fall. Within this cap, organisations receive or buy emission allowances they can trade with each other, and are able to buy limited amounts of international credits from emission-saving projects around the world. A limit on the allowances available ensures their value. After each year, an organisation has to surrender enough allowances to cover all emissions to avoid fines. If the organisation reduces emissions, it can retain spare allowances to cover future needs or sell them to another organisation that is running short of allowances.

CIBSE TM44 – Air Conditioning Inspections

Air conditioning (AC) inspections are a legal requirement under the Energy Performance of Buildings Regulations (EPBR). The objective is to improve the energy efficiency of commercial and public buildings, and reduce carbon emissions. If your organisation has a total installed air conditioning capacity of 12kW or more, it must be inspected to ensure it meets performance standards. Consultus experts are accredited CIBSE Air Conditioning Inspectors and fully qualified to conduct detailed assessments of systems. This can form part of wider efforts to reduce their carbon footprint, driving down energy consumption and saving money on energy bills.