ESTA Conference Highlights: EU ETS and SECR latest updates
This week, Andy Greenall from the Hub team attended ESTA’s IECg conference: Energy: Changing Times in London. We thought you’d appreciate a few of his notes from the day covering environment and energy-related compliance and legislation:
EUETS allowance costs have recently rocketed (currently over €20 – c.f. historical average <€5). In a detailed analysis an energy economist argued persuasively that there’s “little chance of them coming down significantly again”. In fact, he talked about a “possible plateau in a year or two north of €30”. This is something many industrial businesses need to be aware of as it’s yet another significant contribution to energy costs (hence reduction incentive).
SECR latest: BEIS’s Head of Business and Industry Energy efficiency, Tax and Reporting discussed SECR. The key points were:
- Reporting requirements will include a narrative of energy-reduction projects completed in the last 12 months (this has long been mooted, but as far as we know it’s the first time it’s been confirmed).
- SECR qualification requirements, although broadly based on ESOS, now seem to be subtly different: any two of the following three criteria – 250+ staff, £18m balance sheet, £36m turnover (ESOS is either 250+ staff, or both financial criteria). This is the first we heard of this (although possibly it was a phrasing error in the slides – so we’ll check with BEIS on this!).
- The first reporting period is the first financial year starting on or after 1st April 2019 – so all organisations that don’t follow the April to March reporting year will have a reporting gap.
- The finalised guidance isn’t likely to be published until January. There was talk of “a draft being circulated in November”.
- The public sector is exempt from SECR (we knew this already) unless they own limited companies or LLPs which collectively meet the SECR thresholds.