The Countdown to SECR
Streamlined Energy & Carbon Reporting (SECR) will be introduced in April 2019, coinciding with the end of the Carbon Reduction Commitment (CRC) energy efficiency scheme. Matt Dracup, ENGIE’s Energy Services Director, explains how the scheme may affect your organisation.
The CRC scheme has required all qualifying organisations to purchase carbon allowances to cover their carbon emissions. Its aim has been to reduce the amount of carbon dioxide (CO2) emitted in the UK. The government have announced that the CRC scheme will be withdrawn and replaced by SECR in April 2019.
Current CRC charges will be added to the Climate Change Levy (CCL) increasing the CCL on electricity to 0.847p/kWh, and the CCL on natural gas to 0.339p/kWh in 2019/20. Increases of 45% and 67% respectively. As Climate Change Agreements (CCAs) aim to ease the impact of CCL costs on manufacturing and industry, giving CCL relief in exchange for a commitment to improve energy efficiency, these increases will make CCAs a lot more important to businesses.
What do I need to do?
The mandatory reporting of energy use is intended to drive behaviour change by raising awareness of energy efficiencies with organisational decision-makers. As a result, SECR will require businesses to include their energy use (including electricity, gas and transport), emissions and intensity metric in their annual Directors’ report.
In addition to the current mandatory reporting of scope 1 and 2 for quoted companies, they’ll now be required to report on global energy use as well, where appropriate. Unquoted companies will also now be required to report scope 1 and 2 greenhouse gas emissions. Reporting of scope 3 will remain voluntary for both quoted and unquoted companies. SECR participants must also provide a narrative commentary on energy efficiency action taken in the financial year.
While ESOS and SECR are separate schemes, participants can use the information from ESOS to, for example, support energy and emissions reporting in their annual reports. For the time being, SECR won’t require participants to include ESOS recommendations and resulting actions.
Who needs to comply?
Over 11,900 UK organisations will need to comply with SECR regulations, compared with 4,000 organisations who participated in the CRC scheme. This is because SECR will involve many large unquoted companies who haven’t had to report on energy and carbon before.
Large UK incorporated companies will qualify for SECR compliance if they have two of the three qualifying conditions; at least 250 employees, an annual turnover greater than £36m and an annual balance sheet total over £18m.
- Companies that are not registered in the UK
- UK subsidiaries that qualify for SECR but are already covered by a parent’s group report, unless the parent company is not registered in the UK
- Public sector organisations, charities and private sector organisations that don’t file reports to Companies House
- Companies using less than 40,000 kWh of energy in the reporting year
Why is it changing?
The changes have come into place as policy makers realised the need for a simpler reporting framework to reduce the complexity and burden that the existing energy efficiency policies created for businesses. SECR was designed to deliver this simpler reporting requirement and align with existing reporting mechanisms.
SECR will also contribute to the government’s Clean Growth Strategy ambition of enabling business and industry to improve their energy productivity by at least 20% by 2030.
How can ENGIE help?
Businesses can benefit from ENGIE’s experienced Compliance Team who can provide end-to-end SECR compliance assistance as a service. ENGIE can take care of all your SECR obligations, calculate accurate emissions for your organisation and provide all necessary documentation for SECR compliance.
Our Chartered Energy Managers can produce your first SECR report, creating a template that fits your business for future use. We will decide the most appropriate metrics to measure your business against and express your emissions as a ratio of activities chosen specifically for your company. We can carry out all necessary audits to ensure you are fully compliant with SECR, with minimal disruption to your organisation.
Our award-winning online energy-management platform, C3NTINEL®, allows us to enhance the way your data is analysed, seamlessly integrating multiple data sources into one platform and providing easy access to large volumes of energy and environmental data. This enables us to provide reliable performance reporting and emissions assessment, whilst giving you detailed information about your energy use and inefficiencies.