Legislation and Standards

United Kingdom GreenHouse Gas (GHG) emissions fell by 7% in 2011 to 547 MtCO2e. However, only around 0.8 % of this was a result of implementing emissions reduction measures. The mild winter temperatures in 2011 were responsible for 3% of the total fall. Most of the remainder was related to rising energy prices; falling real income; and transitory changes in the power generation mix. Meeting future carbon budgets will require reducing emissions by at least 3% a year. Consequently we can expect further Government measures to limit carbon emissions in the forthcoming years. The current legislation includes:

Climate Change Act

The Climate Change Act became law in November 2008. The Act introduced a legally binding target of at least an 80 percent reduction in greenhouse gas emissions by 2050. And a reduction of at least 34 percent by 2020. Both these targets are against a 1990 baseline.

Energy Act 2011

The Energy Act 2011 received royal assent on the 18th October 2011. The Act is designed to encourage energy efficiency in homes and in businesses through the purchase and installation of carbon-reducing technologies. The Green Deal, a key part of the Act, is intended to ensure that financial frameworks are put in place to make it easier for consumers and businesses to invest in energy-efficient equipment and technologies. For industry in particular, the new Act may allow for capital expenditure of equipment to be spread across a companys energy bills, avoiding upfront costs.

The Energy Act 2011 also covers the private rented sector. It requires the government to introduce legislation which could make it unlawful to let the most energy inefficient commercial properties after April 2018 (i.e. those with an EPC Rating below E; estimated to be some 20% of the stock). This adds urgency to the need to improve the UK least energy efficient property.

The government has set a target for all new commercial buildings to be zero carbon by 2019, with the pathway provided via updates in the building regulations. The government is now increasing its focus on the UK existing building stock as much of it is inefficient in terms of fabric, plant and operation.

ESOS - Energy Savings Opportunity Scheme

In June 2014, the Department of Energy and Climate Change (DECC) published the Energy Savings Opportunity Scheme (ESOS) Regulations. The regulations are intended to help the United Kingdom meet its requirements under Article 8 of the EU Energy Efficiency Directive.

ESOS is an energy assessment scheme that is mandatory for organisations which are classified as large enterprises or that are part of a group that holds a large enterprise.

For more details see our ESOS section

CRC - Carbon Reduction Commitment Energy Efficiency Scheme

This scheme is mandatory for large non-energy-intensive organisations in the private and public sectors. It applies to organisations that have electricity consumption greater than 6000 MWh per year. Emissions covered by the EU Energy Trading Scheme (EU ETS) and by a Climate Change Agreement (CCA) are exempt.

EU Emissions Trading Scheme (EU ETS)

To help manage the reductions agreed in the Kyoto Protocol, the EU has established a market for large industrial facilities to trade the right to emit CO2, called the EU Emissions Trading System (ETS). The total number of allowances being allocated is gradually being reduced.

The large-scale industrial players in the EU ETS include:

  • Combustion-fired power plants
  • Refineries and offshore facilities
  • Iron and steel works
  • Cement and lime producers
  • Ceramic and brick manufacturers
  • Glass manufacturers
  • Pulp and paper producers
  • Engineering and the manufacture of vehicles


Climate Change Levy

The Climate Change Levy is a tax on the use of energy in industry, commerce and the public sector. It aims to provide an incentive to increase energy efficiency and reduce carbon emissions. UK businesses and the public sector pay the levy through their energy bills. All revenue raised through the levy is recycled back to business through a 0.3 per cent cut in employers national insurance contributions. The supplier of the energy is responsible for applying the levy within its energy bills to the user. The levy does not apply to the domestic, transport or energy sectors. Certain forms of energy are excluded or exempt from the levy, such as renewable energy.

GHG Protocol

The GHG Protocol first published its Corporate Standard in 2001 and last revised it in 2004. It now provides the accounting platform for virtually every corporate GHG reporting program, including programs in Australia, Brazil, India, Japan, Malaysia, Mexico, North America, the Philippines and United Kingdom.

Building on the success of the Corporate Standard, the GHG Protocol published the Corporate Value Chain (Scope 3) and Product Life Cycle Standards in 2011, which help businesses evaluate the indirect emissions associated with their value chains. GHG Protocol has also developed many sector specific supplements to these standards—such as those that apply to the agriculture and public sectors.

GRI Standard for Sustainability

The GRI Sustainability Reporting Guidelines offer Reporting Principles, Standard Disclosures and an Implementation Manual for the preparation of sustainability reports by organizations, regardless of their size, sector or location. The Guidelines also offer an international reference for all those interested in the disclosure of governance approach and of the environmental, social and economic performance and impacts of organizations. They are developed through a global multi-stakeholder process involving representatives from business, labour, civil society, and financial markets, as well as auditors and experts in various fields; and in close dialogue with regulators and governmental agencies in several countries.

CCA - Climate Change Agreement

Climate Change Agreements allow energy intensive industries to obtain a 60% discount from the Climate Change Levy provided that they meet challenging targets for improving their energy efficiency or reducing their carbon emissions.
There are currently ten main energy intensive sectors and over thirty smaller sectors with agreements. The main sectors are as follows:

  • Foundries
  • Steel
  • Cement
  • Aluminium
  • Glass
  • Ceramics
  • Chemicals
  • Paper
  • Non-ferrous metals
  • Food and drink


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