Heavy-fine warning for poor CRC reporting

24th May 2011

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Organisations that fail to get right their first Carbon Reduction Commitment Energy Efficiency (CRC) scheme report face penalties equivalent to between 5% and 11% of their energy bills, warns consultant PwC.

CRC participants are required to submit footprint and annual reports by 29 July, detailing all energy supplies – electricity, gas, diesel, LPG and coal – used during the first year of the scheme. The organisation must verify the report and it can be spot-audited by the regulator.

Failing to submit a report on time will attract a £5,000 fine, plus an additional £500 for every day it is outstanding. Inaccuracies in reporting can earn fines of £40 a tonne for under- or over-reporting.

PwC estimates that a 20% mistake by an organisation spending £20 million a year on energy would result in fines of £1 million, while a company with a £1 million energy bill that submitted its reports 20 days late, and made a 20% error in the numbers in its annual report, would face fines of just over £80,000.

Despite the heavy potential penalties, analysis by PwC has found that a significant number of companies affected by the CRC may not be adequately prepared. A recent survey of more than 160 large public and private companies by PwC found that 67% were CRC participants yet only 21% said they were currently reporting carbon emissions.

“Registration last year was the relatively easy part. Now the hard work begins,” warns Henry Le Fleming, carbon reporting specialist at PwC. “Many companies won’t have stress-tested their processes, systems and controls for gathering the data. If they have large numbers of sites with shared responsibility for energy bills it could be more difficult than expected.

“The regulatory powers are wide, and while it’s not certain how strictly they will be enforced, with late reporting or incorrect data both attracting fines, the clock is ticking for companies to get this right over the coming weeks before the deadline,” said Fleming.

The footprint report will define the energy sources reported annually for the next three years, so its accuracy is important, advises PwC. The information will also be used to construct the first performance league table, which will be published in October.

Meanwhile the Environment Agency, the scheme’s regulator, published updated guidance for organisations in February on submitting annual and footprint reports to its online CRC registry.

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