Environmental guidance for your business in Northern Ireland & Scotland

Cutting your carbon emissions

Climate change is the term used to explain the changing weather patterns the earth is experiencing. Because of climate change, the UK is seeing hotter summers, milder winters, higher sea levels and increased flooding.

It is widely accepted that human activity is contributing to climate change through the production of greenhouse gases. These gases - particularly CO2 - are being released into the earth's atmosphere, where they form a layer, which prevents heat from escaping, causing a warming effect.

Businesses can help to tackle climate change by reducing the levels of greenhouse gases they produce. Some businesses, particularly those that are energy-intensive, will have requirements to reduce their greenhouse gas emissions as a result of the UK's commitment to the Kyoto Protocol.

However, all businesses can make changes that will make a difference, such as using less energy or swapping company cars for greener models. It may bring you business benefits too, including cost savings and tax breaks.

Additional resources

       

Video Case Study: How to Reduce Carbon Emissions From Your Business

Climate change may affect your business in a number of ways.

Unpredictable weather can impact directly on your business, for example by increasing the risk of water shortages or flooding. This can cause significant disruption to your business and make it more difficult to get insurance.

DAERA NI: Flood map of Northern Ireland

SEPA: Flooding

Your business may also be affected by measures imposed by the UK government to help meet greenhouse gas reduction targets. These measures include:

  • The climate change levy - a method designed to improve your business' energy efficiency. You may already pay this levy as part of your energy bills. You can reduce the amount of levy you pay by using energy from renewable sources and cutting the amount you use. See our guideline: Generate your own renewable energy
  • Climate change agreements - if your business is in an energy-intensive sector you may be eligible for a reduction in the climate change levy by meeting energy reduction targets.
  • The European Union emissions trading system - if your business is in one of the energy-intensive sectors covered by the scheme, you must report and meet targets to reduce your CO2 emissions.
  • The CRC Energy Efficiency Scheme - if your business' electricity is supplied by half hourly meters you are likely to be included in the scheme.
  • The Energy Saving Opportunity Scheme (ESOS)  If your organisation employs more than 250 people or you employ less than 250 people, but have a turnover greater than 50 million Euros or your balance sheet is greater than 43 million Euros

Even if climate change legislation does not affect you, reducing your emissions can bring other benefits, such as lower energy bills and improving the way stakeholders view your business. You may also be able to take advantage of related tax breaks. See the page in this guideline: Tax breaks to encourage energy efficiency. You can begin to reduce your emissions by:

  • using energy efficiently
  • cutting carbon emissions from transport
  • cutting carbon emissions from buildings
  • designing low-carbon products
  • using suppliers of low-carbon products.

The most effective way of cutting your carbon emissions is likely to be by using a systematic approach to managing emissions reduction - see our guideline: Environmental management systems (EMS) and environmental reports

Reducing energy use is one of the simplest ways to reduce the carbon footprint of your business and help reduce the effects of climate change.

All businesses can reduce their energy use, benefiting the environment and their bottom line. Saving energy can also have other benefits, including boosting employees' morale and an improved business reputation.

Carbon Trust: Why saving energy is good for your business

There are many changes your business can make to cut carbon emissions from energy use.

Carbon Trust: Technology and energy management publications

The changes you make can be as small as turning electrical equipment off overnight or changing your light bulbs to energy-efficient ones. The Department for Environment, Food and Rural Affairs estimates that traditional light bulbs waste 95 per cent of the energy they use as heat. Energy-efficient bulbs are up to 80 per cent more efficient than traditional bulbs and each bulb could save you up to £40 over its lifetime. As part of the effort to reduce emissions, all inefficient light bulbs were phased out in September 2012.

 Energy Saving Trust: Energy Efficient Lighting

You may want to consider larger measures where the financial benefits are more long term, such as investing in new energy-saving plant or machinery.

You may also be eligible for tax breaks, if you invest in certain energy-saving equipment. See the page in this guideline dealing with tax breaks to encourage energy efficiency

Buildings can be a major contributor to carbon emissions, often through inefficient energy use. See the page in this guideline on how to cut carbon emissions from business buildings

For information on reducing energy use in your business, read our guideline: Energy efficiency

Resource Efficient Scotland has produced a series of free, online training modules for SMEs. The training will help develop the skills and knowledge needed to put in place effective resource efficiency measures in your business. They deal with energy, waste and water efficiency. You can work through them at your own speed, choosing the modules that are relevant to your business.

Resource Efficient Scotland: Green Champions Training

The Eden Project has produced guidance that is intended as an introduction to any business or organisation that is thinking of measuring and reporting its carbon footprint for the first time.

Eden Project -Planet Mark: Beginners Guide to Carbon Footprinting

Transport is a significant - and growing - cause of carbon emissions. Some businesses, such as those in the transport sector, will be able to cut carbon emissions to a larger extent than others, but there are actions that all businesses can take.

The first step in cutting your CO2 emissions is to evaluate the impact of your business travel on the environment. This includes:

  • travel to and from meetings and other out-of-office appointments - whether this is by car, plane or train
  • journeys that employees make to and from work
  • the way your business makes and receives deliveries.

The Carbon Trust can help you work out the carbon footprint of your business, including the impact of business travel, and give free advice on cutting carbon emissions.

Carbon Trust: Carbon footprint

Once you have examined your business travel, the next step is to look at ways to reduce or minimise the impact of these journeys. You might consider encouraging your employees to:

  • book several appointments in the same area on the same day
  • work from home
  • use methods of transport with less environmental impact, such as walking, cycling and trains
  • use low-emission vehicles and alternatively powered vehicles
  • drive vehicles more efficiently.

If you transport goods as part of your business, you should ensure that you do this in the most efficient way.

Watch our short video:

How to manage transport impacts from your business

For further information on reducing the environmental impact of your business travel, see our guidelines:

Travel plans

Reducing vehicle emissions.

The Energy Saving Trust has produced a smart phone app that can save you money and track your fuel use. You can find out about the app at:

Energy saving Trust: FuelGood

Further information

Carbon Trust: Carbon footprint calculators

Travel Wise Northern Ireland: Sustainable transport

Energy Saving Trust Scotland: Fleet advice

The Eden Project has produced guidance that is intended as an introduction to any business or organisation that is thinking of measuring and reporting its carbon footprint for the first time.

Eden Project -Planet Mark: Beginners Guide to Carbon Footprinting

Buildings are responsible for around 40 per cent of the UK's carbon emissions, with business properties accounting for around half of that.

There are plenty of simple, low-cost measures you can take to cut energy use within your buildings and lower CO2 emissions. These include installing movement-sensitive light sensors in toilets and other little-used areas and turning down the thermostat by a couple of degrees.

Energy efficiency

There may be additional things you can do - such as installing double-glazing and improving roof insulation - to help make buildings more airtight.

You can consider installing Combined Heat and Power (CHP) systems, particularly when a planned replacement of boilers or heating systems is due.  

Energy efficient building regulations

If you are having new premises built, or you are making structural changes to your existing premises, you must make sure they meet the requirements of:

  • Part F of the Building Regulations in Northern Ireland
  • Section 6 of the Building Regulations in Scotland.

Northern Ireland: DFP: Building regulations

Scottish Government: Energy performance of buildings (PDF, 1.79MB)

All commercial buildings require an energy performance certificate (EPC) when they are bought, let or sold. An EPC indicates how energy efficient a building and its services are. An EPC also contains recommendations for cost-effective changes that can be made to improve the building's energy efficiency and cut carbon emissions.

You must make sure you comply with the requirements of the European Energy Performance of Buildings Directive. These include getting your air-conditioning systems regularly inspected and obtaining an energy performance certificate when you construct, sell or rent buildings.

Northern Ireland: DFP: Energy Performance Certificates

Scottish Government: Energy Performance Certificates

Produce an action plan

In Scotland, owners of non-domestic buildings must assess the energy performance of their buildings and produce an action plan to reduce energy consumption and greenhouse gas emissions. This must be passed on to new owners if the building is sold. There are provisions that make clear when the improvements outlined in the action plan must be carried out.

The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016       

You may be eligible for a number of tax breaks if you introduce energy efficiency measures. See the page in this guideline: Tax breaks to encourage energy efficiency

Further information

Carbon Trust: Loans for energy saving equipment

Resource Efficient Scotland has produced a series of free, online training modules for SMEs. The training will help develop the skills and knowledge needed to put in place effective resource efficiency measures in your business. They deal with energy, waste and water efficiency. You can work through them at your own speed, choosing the modules that are relevant to your business.

Resource Efficient Scotland: Green Champions Training

The Eden Project has produced guidance that is intended as an introduction to any business or organisation that is thinking of measuring and reporting its carbon footprint for the first time.

Eden Project -Planet Mark: Beginners Guide to Carbon Footprinting

Northern Ireland

Department of Finance and Personnel: Improving the energy performance of buildings

Department of Finance and Personnel: Energy Performance Certificates

Scotland

Scottish Government: Energy Performance of Buildings

Scottish Government: Energy Performance Certificates

Designing your products and services so that they produce less carbon is not only good for the environment, it will also make them more appealing to more environmentally aware customers.

It can also help your business to win contracts, such as government tenders, where the use of environmentally aware suppliers is encouraged.

The product life-cycle

To make goods carbon efficient, you need to consider environmental impact at every stage of your product's life-cycle.

The stages to consider include:

  • Raw materials - these must be fit for their purpose, but try sourcing suitable alternatives that are more carbon efficient.
  • Manufacture - can you make your product more simply, cutting the amount and number of materials? Could your manufacturing be more efficient, reducing waste and energy consumption? Are there renewable power sources you can use?
  • Retail - can you cut the distance your products are transported for sale - reducing fuel use and freight costs? Can you minimise packaging to reduce transport costs and reduce waste? See our guidelines: Packaging and Vehicle emissions.
  • Use - can you design your product so it lasts longer or can be more economically repaired? Can you provide better instructions for users so they get a longer life out of the product?
  • End of life - when the end user has finished with the product, is it designed to be reused, for example in a secondary market? If that's not possible, can you design the product so it can be recycled?

You can calculate the carbon footprint of your products - and identify areas for improvement - using the new environmental standard PAS 2050:2008.

There can be a real commercial advantage to adopting the standard, as it can help your customers to make more informed purchasing decisions.

British Standards Institution (BSI): PAS 2050

See our guideline: Energy labelling and ecodesign

Further information

BSI: PAS 2050 Carbon footprinting standard

Carbon Trust: Carbon Footprinting

There are a number of purchasing decisions you can make to help cut your CO2 emissions and reduce your carbon footprint.

Using suppliers of low-carbon products can have more benefits than just helping your business become more environmentally responsible. It can also show stakeholders - such as investors, employees and customers - that you are taking your environmental responsibilities seriously.

Some purchasing decisions may also make your business eligible for tax breaks or reduced environmental taxes. Changing your source of energy, for example, can make your business eligible for a climate change levy reduction. See the page in this guideline on tax breaks to encourage energy efficiency

You could also:

  • Consider swapping company cars for low CO2-emitting vehicles.
  • Buy products from local suppliers to cut down on the distance they are transported.
  • Buy equipment that is energy efficient.

Find suppliers

The Carbon Trust can advise you about the impact of your purchasing decisions on your carbon footprint. It may also be able to advise you about suppliers in your area.

Looking to install energy efficiency or renewable energy technology?

The Carbon Trust provides information that includes lists of accredited suppliers, guidance on energy saving technologies and how you can finance installation.

The Carbon Trust: Green Business Directory

Your local NI Enterprise Centre or, in Scotland, your Business Gateway or trade association may also be able to help you find local suppliers.

Further information

Defra: Green labels and credentials

Tax breaks are on offer as an incentive to encourage you to adopt certain environmentally responsible practices. For example:

  • Using sources of energy that have less environmental impact can make your business eligible for a reduction in the climate change levy.
  • You can benefit from investing in energy saving plant and machinery through tax breaks called enhanced capital allowances (ECAs).
  • You can also use ECAs for investing in company cars that have low CO2 emissions.
  • Businesses that frequently travel in and out of the congestion charging zone in London may be eligible for a discount if vehicles use alternative fuels.

If your business is in an energy-intensive sector, you may need to have an emissions trading permit. See the page in this guideline: Comply with emissions trading requirements

Further information

HMRC: Capital allowance for low emission cars

Carbon Trust: Enhanced Capital Allowance

Environmental tax breaks and obligations

If your business is energy-intensive or uses energy supplied on the half hourly market you may need to comply with mandatory emissions trading schemes.

European Union emissions trading system (EU ETS)

Energy-intensive businesses that release significant emissions into the atmosphere may need to obtain a greenhouse gas emissions permit under the EU ETS.

You may need a permit, for example, if your business is in the:

  • energy sector
  • production and processing of ferrous (iron-based) metals sector
  • mineral sector - eg cement manufacture
  • pulp and paper industry.

Under the system, businesses that emit fewer emissions than their permit allows can sell their excess to firms producing excessive emissions.

If you are unsure whether your business is covered by the EU ETS, you should contact the Northern Ireland Environment Agency (NIEA) or Scottish Environment Protection Agency (SEPA).

CRC Energy Efficiency Scheme

The CRC Energy Efficiency Scheme, previously known as the Carbon Reduction Commitment, is a new emissions trading scheme. It covers large business and public sector organisations. The CRC will have a significant impact on reducing UK carbon emissions and offers businesses the potential to save money through energy efficiency.

The CRC focuses on energy use emissions primarily from large non-energy intensive public and private-sector organisations, including retailers, offices and banks.

If your business' electricity is supplied by half hourly meters you are likely to be included in the scheme.

If your business' total supply of half hourly metered electricity in 2008 was at least 6,000 megawatts you must register as a participant in the CRC.

If your business' total supply of half hourly metered electricity in 2008 was below 6,000 megawatts you must make an information disclosure.

Further information

NIEA: CRC Guidance

Scottish Government: CRC Energy Efficiency Scheme

The Kyoto Protocol is an international agreement which required developed countries to limit their greenhouse gas (GHG) emissions by 2012. These targets are expressed as levels of allowed emissions. At the end of each year, allowances have to be surrendered according to a country's given target. To help meet these commitments cost effectively, the protocol includes several flexible mechanisms.

International Emissions Trading

This allows countries that have unused emissions to sell this excess capacity to countries over their target. Emissions trading can be delegated by countries to mechanisms such as the European Union Emissions Trading System (EU ETS), which facilitates emissions trading between organisations. Emissions trading allows companies that can reduce their emissions to do so and those that can't to buy additional emissions allowances - referred to as carbon credits - from those companies.

The EU ETS provides the main demand for Certified Emissions Reductions (CER) and Joint Implementation (JI) credits as companies covered by the EU ETS can buy certain types of these credits to meet some of their emissions reductions targets.

GOV.UK: Emissions Trading Scheme

EU Emissions Trading Scheme

The Clean Development Mechanism (CDM)

This encourages businesses to undertake projects in developing countries (which have no obligation to reduce emissions under the Kyoto Protocol) to reduce GHG emissions and work towards sustainable development. For each tonne of CO2 equivalent reduced, projects earn Certified Emissions Reductions (CERs) carbon credits. The Environment Agency is the UK's Designated National Authority (DNA) for the CDM, and issues the Letters of Approval (LOA) for voluntary participation in the scheme.

Environment Agency: CDM and JI and letters of approval

Joint Implementation (JI)

Encourages businesses to undertake projects in developed countries under Kyoto Protocol targets to reduce GHG emissions. For each tonne of CO2 equivalent reduced, projects earn an Emissions Reduction Unit (ERU) which can be sold on the carbon market and used to offset emissions elsewhere.

The Environment Agency is the UK's Designated Focal Point (DFP) for JI and issues the Letters of Aproval (LOA).

Environment Agency: CDM and JI and letters of approval

These mechanisms are designed to incentivise the development and implementation of projects that reduce GHG emissions, generating tradeable carbon credits while providing sustainable development, technology transfer and inward investment to the host country. The carbon credits can create a revenue stream and a means to obtain capital finance for the project as carbon finance can improve a project's internal rate of return.

There are several types of project that are eligible for CDM or JI. The projects broadly fall under the following categories:

  • energy efficiency
  • energy supply through less carbon intensive forms of fuel
  • destruction of industrial gases
  • industrial processes - eg cement, pulp and paper, steel, oil and gas production.

Further information

United Nations Framework Convention on Climate Change (UNFCCC): The Kyoto Protocol

UNFCCC: A beginner's guide to the UN Framework Convention (PDF, 404KB)

UNFCCC: Clean Development Mechanism Bazaar

CD4CDM: CDM Guidebook

CD4CDM: Guide to financing CDM projects

Clean Development Mechanism (CDM) and Joint Implementation (JI) projects can offer a range of business opportunities including:

  • meeting emission reduction targets
  • generating additional revenue in the form of tradable credits or raising investment capital
  • improving funding opportunities
  • providing services - eg lawyers, insurers, risk ratings, auditors and project developers
  • brokerage and trading of allowances and carbon
  • selling credits to businesses and consumers.

The Environment Agency is responsible for the approval of CDM and JI projects made after 1 June 2011. CDM and JI projects must be established in accordance with the procedures and processes given by the United Nations Framework Convention on Climate Change (UNFCCC). If a methodology does not exist for a project type, a new methodology can be developed and submitted to the UNFCCC.

UNFCCC: List of approved methodologies

To register a project a developer must:

  1. develop a project proposal and get agreement in principle for the project from the host country
  2. identify the existing emissions (known as the baseline), calculate the level of emissions reductions associated with the project, confirm how the calculation was carried out, and describe how the emissions reductions will be monitored
  3. have the project proposal approved by the host nation for CDM and JI projects
  4. have the project audited and then submit it for international approval to the CDM Executive Board (CDM projects) and to the Joint Implementation Supervisory Committee or the host country (JI projects)
  5. deliver the project and monitor the savings
  6. submit the monitoring for third party verification, based on which the carbon credits will be issued.

Not all emissions reduction projects automatically qualify. A concept referred to as 'additionality' underpins all carbon offset projects. A project activity is deemed additional if emissions of greenhouse gases are reduced below those that would have occurred in the absence of the registered project activity. A carbon credit will eventually be retired to offset a tonne of emissions elsewhere, so if credits are issued to projects for emissions reductions that would have occurred without the project, then there would be no overall emissions reductions. The Environment Agency is the UK's Designated National Authority (DNA) for the CDM, and issues the Letters of Approval (LOA) for voluntary participation in the scheme.

Environment Agency: Establishing a CDM project

Annex I countries are able to host JI projects and Non Annex I countries can host CDM projects, subject to certain conditions being met.

UNFCCC: List of Annex 1 countries

UNFCCC: List of Non Annex 1 countries

To host CDM projects, Non Annex I countries need to have appointed a Designated National Authority (DNA).

UNFCCC: Countries with a DNA

UNFCCC: Parties currently involved in JI projects

Please note some countries are ineligible for either mechanism.

If you are registering your project with a UK project participant you will need:

  • a letter of approval from the Environment Agency
  • a letter from the designated national authority or designated focal point in the country hosting your project.

Please note that the UK Government does not approve JI projects in the UK, but can issue letters of approval to UK companies wishing to participate in JI projects overseas. The Environment Agency is the UK's Designated National Authority (DNA) for the CDM and is the UK's Designated Focal Point (DFP) for JI. The Environment Agency issues the Letters of Approval (LOA) for voluntary participation in both schemes.

Environment Agency: CDM and JI letters of approval

If you have any queries on letters of approval you can email:

All CDM project applications must be validated by a UN accredited validation agency, known as a Designated Operation Entity (DOE), before being submitted to the UNFCCC.

UNFCCC: List of accredited DOEs

 JI projects need to be determined by a UNFCCC approved Accredited Independent Entity (AIE).

UNFCCC: List of approved AIEs

There are a range of companies offering consultancy services that can help you register your CDM or JI project with the UNFCCC. You could also opt to register your project yourself. There are significant costs associated with registering a project under the CDM or JI. However, for small scale projects there are simplified procedures which alleviate some of these costs.

There are a wide range of companies, from large well known organisations to specialist SMEs that have developed services around the global carbon market.

Department of Business Innovation and Skills (BIS): Global carbon market business support

There are two trade associations operating in the sector, the Carbon Market and Investors Association (CMIA) and the International Emissions Trading Association (IETA) .

CMIA: Companies operating in the global carbon market

IETA

To receive credits from a CDM or JI project you will need to hold a registry account.

EU Registry for Emissions trading: Registration and application information

Funding and support

The Carbon Trust offers zero percent interest loans to help organisations finance and invest in energy saving projects. Find out more about loans for energy saving projects on the Carbon Trust website.

Energy saving Trust: Finance and savings

Further information

UNFCCC: Clean Development Mechanism Bazaar

CD4CDM: CDM Guidebook

CD4CDM: Guide to financing CDM projects

UNFCCC: List of accredited DOEs

UNFCCC: List of approved AIEs

Environment Agency: CDM and letters of approval

Environment Agency: JI and letters of approval

Your business should measure and, where possible, avoid and reduce emissions. This can also help your business save energy and money in the longer term. However, there are emissions that cannot be avoided, and you may wish to balance the impact of such emissions through the purchase of carbon offsets.

Offsetting involves paying someone, somewhere else, to save emissions equivalent to those you have produced. These emissions savings - or 'carbon credits' - come from a variety of projects in a number of different countries. However, you should remember that offsetting alone will not necessarily make your company carbon neutral.

How can you check the quality of offset products?

To help you choose good quality offsets make sure you use an offset provider that can:

  • calculate your emissions accurately
  • deliver credits within a year of your buying them
  • declare clearly how much the credits cost per tonne
  • provide you with information about the role of offsetting in tackling climate change and advice on how to reduce your carbon footprint.

If you intend to purchase carbon offsets, you should take the time to check that you are confident that the offsets represent real, independently verified emission reductions or offer other benefits - such as environmental or social - that you would like to support.

For information on getting involved in creating carbon offsets, rather than simply purchasing offsets, see the page in this guideline: International climate change projects and the carbon offset market

Becoming carbon neutral

Many businesses want to become carbon neutral - ie to reduce or offset their emissions so that their total net emissions are zero. The business benefits of this include:

  • demonstrating a clear commitment to tackle climate change
  • engaging employees and consumers on environmental issues.

Under the government's definition, becoming carbon neutral involves three stages:

  • calculating emissions - determining which emissions you're going to calculate, and collecting activity data on these
  • reducing emissions - assessing what reductions you can make and deciding how to achieve this
  • offsetting residual emissions - acquiring carbon credits to offset any emissions you can't reduce.

The British Standards Institute (BSI) has also developed a Publicly Available Specification (PAS) 2060 on carbon neutrality.

BSI: PAS 2060  Carbon Neutrality

Further information

Carbon Trust: Carbon footprint calculators

Carbon Trust: Energy reduction resources

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