Scottish Government

8. Business and Industry

8.1 EU Emissions Trading Scheme

Energy-intensive industry is covered by the European Union Emissions Trading Scheme ( ETS). In Scotland the EUETS covers nearly 100 large industrial installations. This represents around 50% of Scotland's total CO ₂ emissions.

8.2 CRC Energy Efficiency Scheme

The CRC is a mandatory emissions trading scheme that started on 1 April 2010. It applies innovative mechanisms to overcome barriers to the uptake of energy efficiency experienced by large non-energy-intensive organisations. For example, CRC recognises that reputational drivers are as important as financial. Also it seeks to ensure that both landlords and tenants benefit from improving energy efficiency.

All organisations in the public or private sector which used at least 6,000 Mega Watt-hours of electricity through half-hourly meters during 2008 (corresponds to bill of c. £600,000) will be required to participate. SEPA expect that 200 to 250 organisations with headquarters in Scotland will participate, including banks, hotel and retail chains, manufacturers, health boards and local authorities. The threshold does not apply to central government, which is mandated to participate.

CRC participants must monitor and report on emissions from all energy sources, except those already covered by the EUETS or Climate Change Agreements under the Climate Change Levy. Energy used for transport or domestic accommodation is also excluded. At the end of each year participants must return a quantity of electronic allowances equal to their emissions (one allowance is equivalent to one tonne CO ₂). In Phase I (2010-12) an unlimited number of allowances will be available at the start of each year in Government sales. From 2013, the number of allowances will be limited, capping emissions, and will be available through government auctions rather than sales: these allowances may be traded (bought or sold depending on how well each participant manages its emissions), and if necessary additional allowances may be purchased through the "safety valve".

8.3 Scottish Business in the Community / Mayday Network

The Scottish Business in the Community Mayday network encourages businesses to make climate change pledges and take energy efficiency measures. The Network has seen a significant increase in membership from 150 in 2008-09 to over 1100 by the end of 2009-10. The funding provided for 2009-10 enabled the Network to improve their systems and create a clearer model for businesses looking to join the network and/or reduce their emissions. Building on this expanded membership and going forward SBIC will concentrate on establishing a methodology/framework to measure emission reductions of its membership and provide reduction data by end of financial year; measure uptake in advice from signposted organisations on a quarterly basis via leadership group; and provide data to support improved access to case studies of exemplar businesses. Details of the Mayday network in Scotland can be found on Scottish Business in the Community's website ⁵¹.

8.4 Climate Change Business Delivery Group

The Government is supporting the work of the Climate Change Business Delivery Group ( CCBDG) which shares ideas and challenges Scottish business to do more to tackle climate change. The CCBDG has recently looked at how it could provide better support for Scottish businesses and provide strong leadership on tackling climate change. The "Future Focus" paper that was produced by the group sets out a clear range of objectives aimed at supporting and encouraging businesses by sharing experience and good practices.

8.5 2020 Climate Group

• The 2020 Climate Group is a group of senior figures from the public, private and third sector in Scotland who have been convened by Ian Marchant (Chief Executive of Scottish and Southern Energy) to help contribute to the delivery of Scotland's climate change targets (particularly the 42% emissions reduction by 2020). The Group held its inaugural meeting on 8 December prior to a launch event with the First Minister at the Falkirk Wheel. The working remit for the 2020 group is to:build on the work of the Climate Change Business Delivery Group and other climate change alliances to provide strong, visible leadership to Scotland's business and non-governmental communities to inspire them to do more to reduce carbon emissions.
• help drive innovation through partnerships and synergies between members.
• advise on, and aim to make early progress towards, achievement of the outcomes and targets of the Climate Change Delivery Plan.
• identify relevant action and opportunities, and collaborate, to bring benefits to the Scottish economy.
• identify where the group can best target its resources and expertise to accelerate the development, investment and action required across the following areas: Heat, Electricity, Waste, Transport, Rural land use & forestry, Consumer behaviour & attitudes.
• The group comprises of senior executives from across Scotland's business, public and private sectors including NGOs and academia. The group aims to consider how Scotland's business, voluntary and public sectors can work together to help achieve Scotland's targets and the transformational changes required in the Scottish Government's Climate Change Delivery Plan.
• The main aim is to help ensure that all sectors of Scotland's economy and civic society contribute fully to achieving Scotland's emission reduction targets for 2020, and, where relevant, the group will seek to liaise with other groups to ensure alignment of actions and avoid duplication of effort.

8.6 Key Achievements 2009-10:

• First Minister launched the 2020 Climate Group ⁵² on 8 December 2009.
• The Scottish Government provided £150,000 in 2009-10 to Scottish Business in the Community ( SBIC) to support the Mayday Network in Scotland.
• Implemented the CRC Energy Efficiency Scheme Order 2010; this is a central part of climate change policy, which will deliver cost-effective emissions reductions and corresponding financial savings to participants. CRC will ensure energy efficiency in the target sector increases, contributing to ambitious climate change targets by reducing UK emissions by at least 4 Mt CO ₂ p/a by 2020. The scheme is projected to deliver a net benefit to participants of £1 billion a year by 2020, through savings on energy bills. The Order came in to effect on 1 April 2010.
• Contributed to the continued development of the EU Emissions Trading Scheme ( EUETS) through a recent review of the Directive. Working with UK Government on applying the Scheme in an undifferentiated manner across the UK. The EUETS is a key measure to drive ambitious carbon emissions reductions. Following EU agreement, the Directive should improve and extend the scheme from 2013 (Phase III).