Legislation
Below is a summary of the climate change legislation relevant to businesses. If you want to find out more use the Question and Answer section of the website and we will send you more details.Global legislation : Kyoto
The Kyoto Protocol developed from the United Nations Framework Convention on Climate Change (UNFCC), which was signed by more than 150 countries at the Rio Summit in 1992. The protocol, which officially came into force in 2005, sets statutory limits on emissions of 6 greenhouse gases from rich, developed countries. The EU has a target of reducing emissions by 8% on 1990 levels by 2008-2012. The UK's target is a reduction of 12.5% in the same period.
EU legislation : EU Emissions Trading Scheme
The EU Emissions Trading Scheme (EU ETS) currently applies to energy intensive businesses such as mineral industries and pulp and paper industries. Companies are allocated allowances and must ensure that at the end of the year they have enough allowances to account for their emissions. Companies can trade allowances, purchasing additional ones to cover extra emissions or selling any surplus.
UK legislation : Climate Change Programme
In its Climate Change Programme the UK Government has gone beyond its Kyoto requirement and set itself the target of reducing carbon dioxide emissions by 20% before 2010 and by 60% before 2050.
Climate Change Levy
This is a tax on the use of energy in industry, commerce and public sector. The tax is offset by cuts in National Insurance contributions and additional support for energy efficiency schemes and renewable sources of energy. The levy does not apply to very small firms using only a domestic amount of energy.
Climate Change Agreements
These are negotiated targets on energy efficiency and carbon saving which apply to certain energy intensive business sectors. Those businesses that agree to the challenging targets qualify for an 80% discount from the Climate Change Levy.
This scheme is open to all companies with Climate Change Agreements. Participating companies are allocated tradable allowances. Companies can emit in excess of their allocation of allowances by purchasing additional ones from the market. Similarly, a company that emits less than its allocation of allowances can sell its surplus.
