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13 May 2011 02:05:33

DEFRA to introduce mandatory carbon reporting

The environment department (DEFRA) published on Wednesday its plans to introduce mandatory carbon reporting for 30,000 companies. The Climate Change Act 2008 requires the UK government to consider introducing mandatory carbon reporting by 6 April 2012, or explain to Parliament why it has not.

For the coverage of mandatory reporting DEFRA's consultation proposes three options: one is to require all companies quoted on the London stock exchange to report on carbon emissions. This would catch some 1,100 companies, but not privately owned ones.

A second option is to use the threshold for entry into the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. Companies with one or more half-hourly electricity meters settled on the half-hourly market, and which use more than 6,000 megawatt-hours per year would have to report their greenhouse gas emissions. This would affect roughly 4,000 firms.

A final option is for the government to encourage companies to voluntarily report their carbon emissions. Recent research for DEFRA found many firms clearly benefit from reporting, for instance, by cutting energy costs.

DEFRA suggests the regulations would require companies to disclose how they have set the organisational boundary for carbon reporting, for instance, using a financial control, operational control or equity share approach.

The mandatory carbon reporting would require firms to report all direct carbon emissions from production sites and from bought energy. They would also have to apply official UK conversion factors for calculating carbon emissions.

The consultation asks for comments about whether carbon reports should have to be verified or assured. DEFRA says third party audits can be expensive. However, its impact assessment only analysed the costs of internal verification, not external assurance.

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