Landlords And Retailers Join Forces To Prepare For New Carbon Tax

A campaign to raise awareness of a new mandatory emissions trading scheme for firms with an energy bill of £1 million or more per year has been launched by BCSC (formerly British Council of Shopping Centres), the British Property Federation (BPF) and the British Retail Consortium (BRC).

The Carbon Reduction Commitment (CRC) is a 'cap and trade' scheme which will apply to major retailers, banks and large public sector organisations. The Government will publish draft CRC regulations in a few weeks.

An estimated 5,000 businesses will be affected by the legislation, many of them large landlords such as Westfield and British Land who will have to work with their retail tenants to forecast emissions and buy allowances for those emissions. Similarly, large occupiers, such as Marks & Spencer and Barclays will have to do the same.


Traditionally, energy has not been one of the more significant operating costs for offices and shops. But from April 2010, the CRC will allocate a price of £12 per tonne of CO2 from the start of the scheme making energy costs much more relevant to the bottom line. After three years allowances will be auctioned, meaning the price could rise - resulting in a league table of carbon winners and losers. Depending on where they sit in the table, organisations could face either a net cost or gain of between 1-3% of their total energy bill.

The BCSC, BPF and BRC are publishing a guidance paper providing a general overview of the CRC as well as setting out the timetable for its introduction. The guide provides simple advice to those affected and points businesses to more detailed information.

This guide will be followed in the spring by further advice for landlords and tenants on how to apportion the costs and benefits of the scheme between both parties.

Jeremy Collins, BCSC President and Head of Retail Development at John Lewis commented: "BCSC welcomes measures that encourage businesses to improve their energy performance, and while we acknowledge that there are significant pressures on the industry in the current economic climate, we cannot afford to be complacent about sustainability issues in the long term.

"We have launched this awareness-raising campaign to try and fill the significant gap in information and understanding about the effect that the CRC scheme will have across the retail property industry."

(CD/JM)