A leading business group has urged the government to consider allowing firms more time in which to sign up for the Carbon Reduction Commitment (CRC) scheme.
Launched in April 2010, the CRC scheme requires large public and private sector organisations to register with the Environment Agency (EA) by 30 September 2010.
However, the British Chambers of Commerce (BCC) has argued the government should extend the deadline for two months because of the lack of information about the scheme and the number of qualifying firms that have yet to contact the EA.
Under the scheme, firms of certain sizes must declare their energy use and face charges for every tonne of greenhouse gas they emit.
Businesses that consume more than 6,000 megawatt hours of energy each year, or the equivalent of a power bill of £500,000, must file their consumption by the end of September.
As from April 2011, the affected firms need to purchase a permit for every tonne of carbon dioxide they produce.
The purpose of the CRC programme is to promote the reduction of energy use though financial incentives. Companies that register the largest reductions will enjoy bonuses; those that show the poorest records will be hit with penalties.
It is estimated that some 4,000 private businesses and public organisations are covered by the new taxes. Only 2,600 have so far registered with the scheme.
Any qualifying business or organisation that does not meet the registration date will be fined £5,000. After that, the penalties rise by £500 a day until they reach a ceiling of £45,000.
Smaller firms may also be affected. A further 15,000 organisations are obliged to join the CRC scheme in the event that they are required to buy permits at some stage in the future. Missing the deadline means that they will be charged a fine of £500.
Business groups have criticised the scheme for the lack of publicity surrounding it, with many companies unaware that they need to join.
The BCC said that the low response rate has been the result of widespread confusion, much of which surrounds the obligation to sign up even in those cases where a business does not use as much energy as is required to be a full participant in the scheme.
Adam Marshall, director of policy at the BCC, commented: “With over 1,000 companies still not registered, the government must consider extending the deadline before slapping big fines on businesses.
“Confusion and a lack of effective communication have led to this situation, where many companies could be unaware that they potentially face substantial fines. We call on the government to extend the deadline by two months and to more proactively highlight the need to register for the scheme.”
