Chris Huhne MP on business slashing emissions and making money

1 March 2011

Today Chris Huhne MP will welcome a report explaining how energy efficiency in the private sector can cut carbon, safeguard UK fuel-security and save business £6 billion a year.

Chris Huhne MP, Secretary of State for Energy and Climate Change will say:

“Energy efficiency is an untapped opportunity for all UK businesses, whatever their size. By saving energy, businesses can slash overheads and boost the bottom line. What's more, by cutting carbon, the private sector can play its part in reducing the UK's emissions. Carbon Connect's report is a welcome addition to this debate.”

The result of an inquiry by Carbon Connect, the report “Energy Efficiency: The Untapped Business Opportunity” has cross- parliamentary party approval and backing from across the private sector.

Benefits to business

Using energy wastefully currently costs UK business £6 billion a year. This figure is only set to rise as Ofgem estimates that energy prices could climb by over 40% in real terms over the coming decade.

For the 4.8 million small businesses currently operating in the UK, which account for approximately 45% of total business energy consumption and employ nearly 60% of the private sector workforce, tackling inefficiency represents significant savings.

Julius Brinkworth, industry expert and co-chair of the inquiry explained:

“UK business simply cannot afford to ignore the financial benefits of being energy efficient in such tight times. By being smarter about how and when we use energy, the private sector can start making sizeable savings within less than a year”.

Benefits to us all

Moreover, as the UK faces legally binding targets to reduce greenhouse gas emissions by 34% by 2020, and a potentially widening gap between future energy supply and demand, the nation's energy consumption needs to be addressed.

Lord Teverson, Liberal Democrat peer and co-chair of the inquiry said:

“With government leadership, businesses across the UK can thrive, while securing a low-carbon and fuel-secure future for the nation. Now, more than ever before, we must reduce the amount of carbon we emit as a country - reducing energy consumption across the private sector is in both the private and public interest.”

Only last week, the United Nation's called for 2% of worldwide income to be invested in an energy-efficient “green economy”.

The UK already has a framework of incentives to encourage the generation of renewable energy. If government and the private sector follow the recommendations of this report, the UK can develop a thriving market for investment in energy efficiency too.

Through this, business can help the drive towards a low-carbon United Kingdom.

Recommendations to Government

The report proposes solutions describing how Government and the private sector can work together to tackle energy efficiency. For example, the report recommends that:

· SMEs

Government should ensure that a robust system is developed for targeting SMEs under the Green Deal, and should increase the stimulus to the Carbon Trust interest free loan scheme for SMEs.

· Greenhouse Gases

Government should introduce a mandatory greenhouse gas reporting requirement for large companies from 2012, and develop a single framework for UK businesses to use to report their greenhouse gas emissions. This framework could be based on the 2009 Defra/DECC 'Guidance on how to measure and report your greenhouse gas emissions'.

· Tax Rebates

The Department for Communities and Local Government should be consulted on the potential to offer local tax rebates to businesses that improve their energy efficiency.

· Insurance

Government should work with the insurance industry to develop suitable low cost insurance policies for energy efficiency projects.

These are just some of the 15 recommendations the report makes, focussing on greenhouse gas reporting, project financing, skills and support to SMEs, alongside the role of the commercial property sector. To see the document in full, visit here.

Real-life examples

The case studies in the report demonstrate the rewards available to small and large businesses willing to make the leap. For example, the Carbon Trust 0% loan scheme has been helping small businesses to invest in energy efficient changes. The Cavan Bakery in Hampton Hill, Middlesex used the loan to buy new and more efficient ovens, from which it has cut its gas consumption by 75%, enabling it to counter rising energy costs and ride out current financial strains. The Bakery's now looking to source some energy-efficient vans.

Hugh Jones, Managing Director of Carbon Trust Advisory Services explained the benefits to larger firms: “The business case for energy efficiency is clear and compelling. Few other investments get anywhere near that rate of return,'. “Yet our data suggests big businesses are leaving around half the investment opportunities on the table and continuing to waste billions of pounds on unnecessary energy use every year.”

Meanwhile, Martin Baxter, Executive Director - Policy at the Institute of Environmental Management and Assessment (IEMA) welcomed the report on behalf of environmental practicioners: “Environmental practitioners working within business will welcome this report as further recognition that their role makes a real difference. Businesses that are managing energy as a resource are seeing real benefits from enhanced productivity and competitiveness.”

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