LONDON (Reuters) - Britain is pressing ahead with a plan to make energy-intensive businesses including banks, hotels and schools cut their energy use and carbon emissions, the Department of Energy and Climate Change said on Thursday.
The Carbon Reduction Commitment (CRC), which includes all central government departments and local authorities, is a mandatory scheme that will help Britain cut greenhouse gas emissions by four million tonnes by 2020, the equivalent of taking one million cars off the road.
On Thursday, DECC published a guide to help affected businesses prepare for the scheme's start and the government launched a consultation for the next stages, DECC said in a statement.
"The CRC could help business save a total of 1 billion pounds ($1.38 billion) by 2020, whilst also helping them play their part in the fight against climate change," Energy and Climate Change Minister Joan Ruddock said.
The scheme starts in April 2010, when some 5,000 British firms that spent over 500,000 pounds on electricity in 2008 must register and disclose their energy use and carbon footprint.
At the end of 2010, the companies will have to retroactively buy carbon allowances from the government to cover their emissions for that year.
Following that, businesses must buy allowances every April starting in 2011, based on their expected annual emissions.
The revenues raised will be recycled back to participants based on improvements made in energy use and emissions cuts.
"Those who are making most improvements in energy efficiency will be recognized and financially rewarded," DECC said.
But critics say many companies are still uninformed about their upcoming commitments, despite government efforts.
"Many companies remain unaware and unprepared for what the CRC will involve, and are in for a real shock when these changes become law," said Neil Bentley of the Confederation of British Industry (CBI), which represents around 240,000 business that employ a third of Britain's workforce.
Consultants WSP UK estimate compliance costs could run as high as 500,000 pounds for chain stores and around 1 million pounds for the largest participants.
"Firms needs to start gearing up for the changes now by thinking about how they plan to monitor their energy use," added CBI's Bentley.
The scheme will not affect installations already participating in the European Union's Emissions Trading Scheme.
Britain's emissions in 2007, the latest figures available, were 639.4 million tonnes of carbon dioxide, already well within its Kyoto target of 12.5 percent below 1990 levels.
Britain has also committed to a further EU-wide goal to reduce 1990 levels by 20 percent by 2020.
(Reporting by Michael Szabo; Editing by Keiron Henderson)
