Deadline looms for NHS carbon allowance payments


Trusts face hefty fines if they fail to show reduction in carbon emissions under government scheme

NHS trusts face huge fines as the deadline for the purchase of new carbon emissions allowances looms.

Compulsory annual reporting of CO2 use came into force across all NHS trusts in England earlier this month, with the new Carbon Reduction Commitment (CRC) initiative meaning healthcare organisations will now have to purchase allowances to cover future energy use.

Based on current emissions figures, and with trusts having to show a year-on-year reduction in output, all organisations will have to calculate how much energy they expect to use over the next year. In the early stages of the programme, they will pay a set rate of £12 per tonne of CO2. After a three-year trial, they will have to bid for allowances through auctions. Over the years the total number of allowances available will be cut, with the aim of driving down total emissions.

The timetable for the CRC returns shows trusts will be able to purchase allowances from 1 June this year and will need to have completed the process by 31 July.

And trusts are being warned if they exceed their allowances they face fines of £40 per unit in addition to the £12 unit cost.

Guidance published this week by the NHS Sustainability Unit (SDU) states: “Different organisations will take different approaches to buying allowances. As the exact number of allowances required is not known until the annual report has been finalised some organisations may wish to estimate the number of allowances required prior to this in order to get the payments in place in time to purchase the allowances. Organisations may wish to purchase allowances based on their estimations and it is then possible to purchase more allowances to top-up or carry over the difference once the annual report has been finalised.”

It warns that the process for purchasing allowances will take trusts up to two weeks, adding: “The CRC scheme is designed to improve energy efficiency, save organisations money on fuel bills and also reduce carbon emissions. It will also drive changes in behaviour and infrastructure and generate corporate awareness of emissions. Participating trusts will have to report their baseline energy use and their carbon emissions.

“The CRC will save the NHS money by helping it to reduce its CO2 emissions in line with the targets outlined in the Sustainable Development Unit's NHS Carbon Reduction Strategy for England .

“The scheme is mandatory and according to Government figures will save participants, public as well as private sector, a total of £1billion a year by 2020.”

Sign up for your free email newsletter

Click here for the SDU guidance