Mandatory emissions reporting decision could be delayed further

Rules requiring companies to report on their greenhouse gas emissions look set to be delayed until later this year due to a bottleneck in the government’s legislative process.

A consultation on four options including both mandatory and voluntary reporting closed in July and the government was expected to publish a further consultation on its preferred option by the end of 2011 in order to ensure it complies with a timeline set by the Climate Change Act

The Act says that by April 6 2012 the government must either introduce a legally-binding carbon reporting regime or explain to Parliament why it has not done so.

A number of ministers are understood to be keen on introducing mandatory reporting rules and the proposals also have the backing of influential industry groups.

Dr Matthew Brown, head of energy and climate change at the CBI, told BusinessGreen mandatory reporting would help businesses save money and carbon, and be a much better driver of change than the CRC performance league table.

However, a pledge in the coalition agreement means the government cannot introduce a new regulation without removing another one.

Speculation is mounting that the government is struggling to comply with this “one in, one out” policy, leaving the regulations stuck in limbo and ministers facing a race against time to consult before the April deadline or be forced into an embarrassing delay that could be subjected to a legal challenge.

Speaking to BusinessGreen, a Defra spokeswoman admitted the government may miss the April deadline to bring in new rules, but insisted any delay would be explained to parliament in accordance with the Climate Change Act.

“To make any changes we would need to consult first and that could take us beyond April,” she said. “By the 6th April we definitely will have a consultation or explained the situation to Parliament.”

Martin Baxter, executive director of policy at the Institute of Environmental Management and Assessment (IEMA), said the delay at least made it more likely that the government was looking to bring in mandatory reporting.

He added that the government may look to tie in the regulations to proposed changes to the future of corporate reporting outlined in a separate Department of Business, Industry and Skills (BIS) consultation, whose proposal to change the Companies Act could come into force in October. Defra was unable to confirm whether this option was being considered.

Baxter said such a move would make more sense for businesses, but urged the government to outline its proposals for mandatory reporting as soon as possible to give companies sufficient preparation time.

“Just because the regulations are still in development that doesn’t mean [the government] doesn’t need to get on with outlining the mechanism and the size of companies covered,” he told BusinessGreen. “The longer we can give companies to prepare the more likely they are to have data management processes embedded.”

His views were echoed by Andrew Raingold, executive director of the Aldersgate Group of companies, NGOs, and MPs, who said the delay sent “mixed signals” about the government’s desire to simply the complex landscape of environmental legislation.

“We would welcome an amendment to the Companies Act as [emissions] reporting is a business issue and should be part of that,” he said. “But the government still needs to give clear signals about its intentions and more detail of requirements.”

However, Lois Guthrie, executive director to the Climate Disclosure Standards Board, said the delay was unnecessary.

“It’s a little odd that in 2008 Defra could lay down a requirement that something has to happen by 2012, but not also say that this could be over-ruled,” she said. “Defra could always introduce a requirement for mandatory reporting and work out the details later, or let someone else do it.”

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