Carbon set to cost UK businesses £570m this summer

Print Email to a friend
Print Printer friendly
 
 
 
 
15 June 2006
Wasted energy will cost UK businesses £570 million this summer, owing to poor energy efficiency according to new figures released today by the Carbon Trust. This means that even in the summer months businesses are wasting 15 per cent of total energy spend, which could be cost effectively saved.

Wasted summer energy emits over 8 million tonnes of carbon dioxide, the equivalent to Birmingham’s annual carbon emissions and enough to fill the new Wembley stadium a thousand times. As carbon emissions are the key cause of climate change, and business is responsible for up to 45 per cent of all carbon emissions in the UK, the Carbon Trust urges all companies to act now to improve energy efficiency and reduce the cost of carbon.

The ‘cost of carbon’ lies at the heart of a new £4million television and newspaper campaign being launched today by the Carbon Trust which highlights the significant amount of energy that is used and wasted by businesses through failing to prioritise cost effective energy efficiency measures. Energy prices have soared in the last two years and are continuing to rise, damaging the bottom line and posing a serious threat to business competitiveness. The campaign encourages businesses to contact the Carbon Trust and seek help in cutting energy costs and carbon emissions ahead of the critical winter period.

The new research also looks at the summer energy used and wasted by businesses across ten UK cities and key manufacturing and service sectors. Across manufacturing, including the food and drink and chemical sectors, the amount of energy spent is £1.8 billion, of which 12 per cent (£226 million) is wasted. In the service sector, industries such as wholesale and retail and leisure are spending £1.6 billion, of which 19 per cent (£305 million) is wasted during the summer.

Tom Delay, Chief Executive of the Carbon Trust, said:
“British businesses are wasting millions on energy, hitting the environment and their bottom line. The sheer scale of the energy wasted is staggering and something businesses can no longer afford to ignore. What’s more, consumers and shareholders alike are becoming more aware of a company’s environmental record and this trend is only going to grow. Today’s campaign will empower companies to make business sense of climate change by taking cost effective action – to cut carbon and make significant savings on their bottom line. Energy saving today is a no brainer for business and the environment.”

Supporting the launch of the campaign Ian Pearson MP, Minister of State for Environment and Climate Change said: “We welcome today’s campaign launch that will highlight the cost of carbon emissions to business and how it can be addressed. By working with the Carbon Trust, we can fully engage the power of business to help us tackle climate change. Defra takes its leadership role on energy efficiency very seriously and was the first central government department to sign up to the Carbon Trust Carbon Management programme to address its own emissions. This campaign is timely as in the last few days this Government has committed to making the Government office estate carbon neutral by 2012, and to reduce Government's total emissions from buildings by 30% by 2020.”

Supporting the launch of the campaign, Michael Roberts, CBI Director Business Environment Policy said: “Companies recognise the important role they have to play in reducing carbon emissions. Business has helped deliver the bulk of savings to date in the UK - but more can still be done to cut energy use by all sectors and all sizes of company. Cutting carbon emissions through energy efficiency means lower costs now and a more secure supply of energy in the future and the Carbon Trust can help businesses achieve this.”

The Carbon Trust already works successfully with thousands of businesses offering practical help and advice. Businesses with energy bills of more than £50,000 a year can apply for free surveys from Carbon Trust consultants, who can identify energy-saving opportunities and growing businesses are offered interest-free loans of up to £100,000 (£200,000 in Northern Ireland) to help them invest in energy efficient equipment. Last year the Carbon Trust identified carbon savings of 2.7 million tonnes of carbon through working with companies. To find out more, businesses can call the helpline on 0800 917 3030 or visit the Carbon Trust website: www.carboncosts.com.


 
 
Related content
 
To request an interview, additional case studies, energy saving tips or photography, please contact the Carbon Trust Press Office on 020 7544 3100.

Overview of savings that can be made cost effectively

 Cities
City Carbon emissions over summer (thousand tCO2) Carbon wasted over summer (thousand tCO2) Cost of carbon wasted over summer (£M) % Cost saving Number of times the new Wembley stadium can be filled
Cardiff 269 50 3 17% 6
Newcastle upon Tyne 202 38 3 21% 5
Liverpool 310 58 4 19% 7
Manchester 427 81 6 21% 10
Leeds 590 112 8 20% 14
Birmingham 573 106 7 18% 13
Greater London 5963 1135 79 19% 144
Oxford 136 26 2 22% 3
City of Bristol 296 57 4 20% 7
Belfast 210 40 3 21% 5
All figures are calculated for businesses only

Vertical sectors
Carbon emissions over summer (thousand tCO2) Carbon wasted over summer (thousand tC) Cost of carbon wasted over summer (£M) % Cost saving
Chemical 6161 739 43 12%
Food & Drink 3680 442 26 12%
Manufacturing 30791 3695 226 12%
Wholesale & Retail 8926 1738 139 20%
Leisure 4026 678 53 17%

 

Case studies

J Sainsbury plc

Sainsbury’s has reduced its carbon emissions considerably, following a concerted energy efficiency programme which has seen them work alongside the Carbon Trust. Its goal is to reduce carbon dioxide emissions by sourcing energy responsibly, minimising energy demand and promoting efficient consumption, and, having invested £14m in measures over the last three years, various projects are already paying dividends.

The retailer has achieved a 20 per cent CO2/m2 reduction on energy use between 2001 – 2005, against an initial target of 10 per cent. Energy efficiency projects alone have contributed to an 11 per cent decrease in carbon emissions. This reduction in energy use equates to a cost saving of in excess of £8M per annum from the start of the target period - 1997/98. Various stores are also taking a lead on reducing fossil fuel energy, with a wind turbine at East Kilbride depot, Greenwich and Kingston stores, installations of Combined Heat and Power* in five stores, solar panels and natural lighting in the Greenwich store.


Westbury Dairies
Westbury Dairies is the largest single-site dairy in the UK and has the capacity to process over 2.5 million litres of milk per day. Processing these volumes clearly requires a large amount of energy, and in 2004 Westbury’s annual bill was in excess of £2m.

The company’s mission statement is to become the “most efficient, flexible, world-class manufacturer of creams, butters and milk powders” and was already relatively energy efficient when it contacted the Carbon Trust, consuming 43.5% less energy than a typical dairy. However, with energy costs expected to significantly rise in 2005 Allan Walker, Westbury Dairies’ Engineering Manager still wanted to investigate what more could be done to reduce its spend and carbon emissions. Although he was dubious about how the Carbon Trust could help achieve worthwhile savings on a process that had already been designed to such high energy efficient standards, he was impressed by the scale of the opportunities identified so far.

It was estimated that if all the measures were taken, Westbury Dairies would realise an annual saving of over £400,000 each year on their energy bill, as well as reduce their carbon emissions by almost a sixth.


The Carbon Trust

  • The Carbon Trust works with UK business and the public sector to cut carbon emissions and develop commercial low carbon technologies. An independent company set up by Government to help the UK meet its climate change obligations, the Carbon Trust creates practical business-focused solutions to carbon emission reduction on energy efficiency, carbon management, and investment.
  • The Carbon Trust's annual funding is in excess of £105m in grants from the Department for Environment, Food and Rural Affairs (Defra), the Department of Trade and Industry (DTI), the Scottish Executive, the Welsh Assembly Government and Invest NI.
  • The Carbon Trust also promotes the Enhanced Capital Allowance (ECA) Scheme for energy saving investments on behalf of Defra and manages the associated Energy Technology List. This ECA scheme is a tax relief that enables businesses to claim 100% first-year capital allowances on investments in energy saving equipment listed on the approved Energy Technology List. Further details on qualifying products and ECAs are available at www.carbontrust.co.uk/eca
  • For advice on energy efficiency and reducing carbon emissions contact the Carbon Trust on 0800 917 3030 or visit www.carboncosts.com.

Overview of methodology to calculate the energy costs and carbon emissions

  • In order to do this it was necessary to determine monthly energy consumption by end-use (e.g. heating, cooling, lighting) since the consumption in these areas varies over the year.
  • The monthly energy consumption was calculated by fuel type so that the different carbon emission factors and costs for each fuel type could be used to determine summer carbon emissions and costs.
  • To determine wastage, two definitions of waste were used. The first assumed that the savings which are estimated to be available from applying all cost effective measures was equivalent to energy wasted. The second assumed that the savings which are estimated to be available from applying all operational (i.e. no cost, managerial and good housekeeping) measures was equivalent to energy wasted. The latter is a subset of the former.
  • Summer is defined as being June to September inclusive.

The research was undertaken by BRE. For more detailed information on the methodology please contact the Carbon Trust Press Office on 020 7544 3100.