Carbon Reduction Commitment Trade Association Forum

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Carbon Reduction Commitment Trade Association
Forum

• How the BPF is supporting its Members

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Presenter

• Patrick Brown, Senior Policy Officer, British
  Property Federation
• Tel [phone]
• Email pbrown_at_bpf.org.uk

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The British Property Federation

• Representative organisation for those who own and
  invest in property
• We aim to create the conditions in which the
  commercial property industry can grow and thrive,
  for the benefit of our members and of the economy
  as a whole
• In representing our members, we seek
• to raise further the profile of the property
  industry with political stakeholders, the media,
  and the public
• to obtain for the industry legislative, fiscal
  and regulatory conditions that maximise its
  success and so enhance the benefits the industry
  can bring to the UK
• to encourage best practice within the industry as
  a means of increasing long term value and
  improving stakeholder perception

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Sustainability the challenges
Housing 27
Housing 27
Housing 27
Commercial 17
Commercial 17
Commercial 17
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CRC Why are Landlords Affected?

• CRC will require non-intensive energy users to
  purchase emissions allowances. These allowances
  will then be surrendered commensurate with energy
  use
• Organisations whose half-hourly metered energy
  usage is greater than 6000 MWh in the calendar
  year 2008 (which equates to an annual energy bill
  of 500k) will be within the Scheme
• Expected to be 5000 organisations, and they
  include all well known retailers and a number of
  major landlords
• Highest UK parent body will be designated as the
  CRC organisation, having responsibility for its
  administration
• But UK leasing environment is diverse and various
  models exist for provision of energy in rented
  buildings

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Rented Buildings and Energy Costs
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Effect on Landlord and Tenant

• In situations where a tenant pays its own energy
  bills for the leased space, then neither tenant
  nor landlord will be affected. Impractical to
  roll this out to wider tenant community as this
  would be very costly to implement
• BUT in a situation where a landlord which is a
  CRC organisation pays the energy bills for a
  building and charges the costs to the tenant
  (either directly or through the service charge),
  the energy associated with that bill will have to
  be reported to the Scheme administrator by the
  Landlord as part of its organisations overall
  energy consumption and will be responsible for
  buying and subsequently surrendering allowances
  to cover the emissions associated with such
  consumption
• So where a building contains one or more tenants
  that do not pay their own energy bills, or
  contains common parts (or both), it will be
  necessary to develop a structure to enable the
  landlord and tenant to take full account of the
  CRC Scheme

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Effect on Landlord and Tenant II

• The structure that is developed will need to take
  into account
• Both new and existing lettings
• Both the cost of the emissions allowances and
  also the method of dealing with the revenue
  recycling payments
• The landlords administrative expenses in
  operating the Scheme
• Inclusion of specific provisions to cover the CRC
  Scheme every time a lease is granted
• Flexibility to accommodate arrangements for
  sub-metered tenant areas, and those buildings in
  which sub-metering is not in place and the
  various models of energy provision in existence

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What is the BPF Doing? Policy

• Held workshops with Defra in 2007 on policy
  considerations for rented property
• Assembled a cross-industry group in the past few
  months (including representatives from the Royal
  Institution of Chartered Surveyors, British
  Retail Consortium and Defra) to work up industry
  guidance on how the costs and benefits of the
  Carbon Reduction Commitment might be apportioned
  between landlord and tenant
• Will be actively contributing to the consultation
  on the final shape of the Scheme due in the next
  few months

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What is the BPF Doing? Information for Members

• Working with contacts in the trade press to
  promote awareness of the Carbon Reduction
  Commitment among the broader industry
• Promotion of awareness among our members via
  seminars for decision makers and practitioners on
  how to get prepared for the introduction of the
  CRC
• Inclusion of regular policy updates via our
  Weekly Notifications to members
• Planned production of a Need to Know guide

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What is the BPF Doing? Practical Tools (LES-TER)

• Industry initiative by British Property
  Federation, Usable Buildings Trust and Carbon
  Trust (since 2005)
• A free-to-use methodology devised to help
  landlord and tenant to exchange energy data in an
  agreed format based on the energy they control
• Iterative process, based on annual measurement,
  reporting and improvement
• Seeks to break down traditional barriers between
  landlord and tenant, whilst also recognising the
  commercial boundaries which exist
• Helps both landlord and tenant to measure and
  manage their actual energy use and carbon
  emissions from both landlord services and tenant
  direct supplies

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Summing Up

• Hope to produce a useful guidance document on
  these issues with Defras approval will be
  available for both landlords and tenants
• LES-TER available free to any who wish to use it
  to measure and manage energy use www.les-ter.org