Do you know how much energy your business consumes? If not, the chances are you will have to play catch-up very soon. The government is putting pressure on business to reduce CO2 output in order to meet its ambitious 80% reduction target for 2050, as advised by the Climate Change Committee. While that deadline may be a way off, action needs to be taken soon and there's a good chance that your business will be affected.

Next month, the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, a mandatory emissions-measuring scheme, comes into force and, in order to better understand how it works and how it will affect the print industry, PrintWeek caught up with the head of climate change at the Environment Agency, Malcolm Fergusson.

What is the Energy Efficiency Scheme and who does it target?
It won't affect the biggest emitters, like steel or coal, because they are already involved in the EU emissions trading. It targets the next stage down - large organisations in both the public and private sectors, which are significant users of energy, particularly electricity. It covers around 5,000 large organisations that will have to fully participate and a larger number that will have to report. All organisations that had at least one half-hourly meter (HHM) settled on the Half Hourly Market in 2008 will be required to do something. Businesses qualify as full participants if, during 2008, they had at least one HHM settled on the Half Hourly Market, and a total annual electricity supply through all HHMs of 6,000MWh or greater. These companies have to make a declaration of their electrical consumption and register for the scheme. Registration opens in April and closes in September.

How does the buying and selling of allowances to cover emissions work?
Companies will have allowances each year to cover their energy consumption - that's gas, electricity and some oil. They will have to buy credits at a fixed price - initially, that will cover the amount of energy that they expect to consume in the coming year. If a company finds that it has more than it needs, it can sell that later. If it doesn't have enough, then it can buy it, although that would be on a secondary market. This is meant to give people an incentive to get a handle on energy demands and to manage them better. Companies that will have the most difficulty reporting to us will be those that don't know much about their energy consumption. Becoming more aware of consumption in order to report should make the process easier. The benefits they will derive from saving energy will outweigh the costs of participating in the scheme.

What action do you feel printers can take in the short term to reduce their energy consumption - are there any immediate measures they can put in place?
Printing companies often operate in premises that are inefficient when it comes to energy use, and there are ways to tackle that. Older machinery isn't terribly efficient either and it's worth investing in more efficient kit. There are also other, more generic measures to do with things like heating and basic boiler management that can improve an organisation's performance. The Department of Energy and Climate Change, for example, improved the rating of its building - an old building - from G to D in six months, thanks to some simple measures such as reducing the amount of lighting it used. But if you don't monitor the energy you use, you can't manage it.
 
Is there government help available?
Companies will need to talk to the Carbon Trust in detail about what exactly is available. Certainly it goes beyond advice and can help smooth the pathway through an efficiency audit.

Are there any exemptions from the scheme?
Companies that have a climate change agreement in place can claim an exemption, but they will have to report to us. In fact, you can be exempted even if quite a modest proportion of your activity is covered by a climate change agreement. However, they will have to pay the registration fee.

Companies may argue that if they still have to pay for something they're exempt from, then they are being financially penalised. Is that a fair comment?
The registration fee covers the cost of the scheme - and we are talking about large organisations, many of them with multiple meters. This isn't a stealth tax, it's a legitimate means of covering the cost of setting up the scheme. It's possible for some organisations, which are doing really well already, to say it's not helping them. But for most companies, we believe it will. If people keep reducing their energy consumption, then they will benefit from that. They will also be rewarded with a good position in the league table [a public guide to who is saving the most energy]. This goes beyond traditional carbon reporting, which isn't in all cases completely transparent. We should be able to get a fair comparison of different organisations.

If a company is not exempt then I understand that there is an annual fee of around £1,000. Bearing in mind that energy prices are still high, is it fair to make these businesses stump up more cash?
I can understand that it might seem unfair, but these companies are paying upwards of £500,000 a year just for their electricity. In relative terms, the fee is quite small and we're pretty convinced that the potential benefits of acting will far outweigh those costs. If energy prices are rising, then that's more cost avoided and greater savings to be made.

How aware are people of this scheme?
We have done a lot of work to make people aware of it and that we aren't coming around with a big stick to impose penalties on them. We hope to work with organisations to help save them money. They will have to report, but we've tried to make it as user-friendly as we can. It will all be web-based and will be up and running on time. We try and encourage businesses to do the right thing - we're not a heavy-handed organisation that's coming in to make life hard for them. We understand the problems people have. We have tried to be a light touch as much as possible with this. For companies that don't have energy consumption under control it may be a bit burdensome initially - the biggest effort will be setting up their reporting. Once they've got that, then it should be a real help in managing their energy consumption.

Is there political consensus on this?
This is a pretty major scheme and, as I recall, the Conservative Party has indicated its general support for climate change measures. I'm not aware that they have said anything specific in recent weeks or months to suggest otherwise. We will be looking to start, as planned, at the beginning of April. The crucial window is between April to September. That's when we need all companies to register for the scheme and start preparing for their reporting.

What happens if a company doesn't register? What powers does the Environment Agency have?
There are penalties for not registering and quite severe penalties for deliberately manipulating figures. We believe that people higher up in an organisation need to know about this as they are the ones having to register and make commitments to report. They need to be aware of the implications and the effect on their reputation. There are risks if they don't take part, but also benefits of looking good.

Could directors even go to prison?
That is technically possible, but we hope it's very unlikely. We are not in the business of throwing people into prison - it's a last resort. But yes, we do have penalties that are proportionate and senior officials will be held responsible.

How do you feel print compares with other industries?
A lot of people in print are already aware of issues such as paper sourcing, inks and dyes. However, it's a fairly energy-intensive industry. In truth, we don't know enough about it at the moment. Once we get the reporting in, we will be able to make those comparisons with more confidence.

Is the ultimate goal reducing carbon emissions?
As a country, we have major targets to reduce CO2 emissions by at least 80% by 2050. That means a lot more low-carbon electricity and heat. But it also means we have to start using our energy more efficiently. We can't do it by just installing windfarms. The sectors that are caught by the CRC are quite substantial - they use about 10% of energy.