SAP Backs Government Calls For CRC Registration

Business software giant SAP is backing government calls for companies to register for Carbon Reduction Commitment legislation ahead of the 30 September deadline.

Earlier this week, the Department for Energy and Climate Change issued a reminder of the registration deadline to the large businesses which will fall under the remit of the new scheme.

“This new coalition government wants to boost energy efficiency in business because we know that saving energy saves money,” said Energy and Climate Change Minister Greg Barker. “The CRC will encourage significant savings through greater energy efficiency and importantly will make carbon a boardroom issue for many large organisations.”

Only 1200 Signed Up

Companies have had since April to register for CRC, but so far only 1229 of the 5000 organisations that the government estimates will have to “participate fully” in the scheme have applied. Another 20,000 organisations will be indirectly affected by the new carbon rules, according to DECC.

The CRC requires large energy users to report on their consumption. The largest of these users will also be required to report their emissions and participate in a cap and trade scheme where carbon allowances are traded according to use.

Companies who fall under the remit of CRC but fail to register in time face fines of up to £5000, followed by an additional charge of £500 per working day for every day after 30 September that companies fail to sign-up.

But while the government is keen for companies to register for CRC, Baker admitted that the complexity of the rules was probably deterring some companies from registering. “My message to businesses today is to register now. I understand the original complexity of the scheme may have deterred some organisations and I want to hear suggestions as to how we can make the scheme simpler in the future,” he said.

It is this complexity which IT companies such as SAP hope to benefit from by offering software tools and services to help companies adhere to the scheme. The company’s head of sustainability, Martin McCann, concurred that CRC was inherently complex. According to a survey by the company, 20 percent of companies affected by the rules had not even started planning for it.

“Registering is not complex. However, there is much confusion in the industry as to what needs to be incorporated in the scheme’s first submission to the Environment Agency in 2011,” said McCann. “This process can take time but early registration maximises preparation time, helping companies get a head start in making sure they have the right infrastructure in place to reduce emissions and cut costs.”

Data Collection

SAP is keen to point out the short-comings of many companies’ energy data collection techniques, which are based on spread-sheets.  “Companies have generally never collected energy and fuel data to this level of accuracy before. Many registered companies are engaging in a huge spreadsheet manipulation task expecting that this will enable CRC reporting,” said McCann. “However, spreadsheets, don’t make for easy auditing, making it likely that errors will be introduced into the CO2 equivalent conversion factors and final submission, and critically don’t enable companies to mange energy reduction – the objective of the scheme.”

The business software specialist also pointed out that the next next stage of the legislation will penalise those companies that are not prepared.

“Phase 2 of the scheme commences in 2013 becoming a ‘cap and trade’ legislation. This places additional planning, forecasting and analysis requirements on organisations. Those companies that do not put the systems in place today to develop world class carbon allowance trading
strategies risk facing significantly higher than optimal carbon costs in phase 2 of the scheme,” McCann said.

Data Centre groups are pushing for an exemption from the CRC claiming that IT can help companies to reduce carbon from other activities such as transport.