Monday, 9 July 2012

Firms fined £99,000 for failing to report CRC data

The maker of Pritt Stick and Schwarzkopf hair products is one of four companies to be fined a total of £99,000 for reporting failures under corporate emissions cutting scheme, the controversial Carbon Reduction Commitment (CRC).

Henkel was last week ordered by the Environment Agency to pay £38,000 for late submission of a footprint report and an annual report required by the regulation, which compels around 2,100 businesses with energy bills over £500,000 a year to measure and pay for each tonne of CO2 they emit.

Failure to submit these two reports by last year's 29 July deadline also saw international utility Saur's UK arm fined £41,000, engineering company BI Group £10,000, and engineering and manufacturing group Tomkins Ltd £10,000.

Late reports submitted within 40 working days of the cut-off date are usually subject to a £5,000 penalty and an escalating fine of £500 for each working day past the deadline.

The Environment Agency can use its discretion to modify penalties if a firm has demonstrated that it took reasonable steps to comply with the order or tried to rectify the problem once it became aware of it. This explains the lower fines for BI Group and Tomkins.

Neither the Environment Agency nor Henkel had responded to a request for comment at time of going to press. BusinessGreen was unable to contact Saur, BI Group, or Tomkins.

The future of the CRC remains unclear until the government issues its response to a consultation on simplifying the scheme.

The Chancellor has said he will scrap the CRC if the administrative burden cannot be reduced, an outcome made more likely given the introduction of mandatory emissions reporting for 1,800 of the UK's largest firms in April next year.

However, Paul Sheridan, a partner at law firm CMS Cameron McKenna, said the scale of the fines indicated non-compliance will be taken seriously, particularly if companies have made little effort to rectify the problem.

"These fines were on the high side – it's clearly sending a message [the CRC] has to be taken seriously," he told BusinessGreen. "We might expect for a new regulation there would be a slow start and a ramping up over time, but they seem to have gone in quite heavy."

He added the fines offered a "stark reminder" to companies to submit this year's annual reports by the end of July, despite uncertainty over the CRC's future.

"The scheme may be under fire, but not the principle of the levy," he said. "The same information is ultimately required."

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