Carbon & energy continue to top the list of financial and regulatory challenges that businesses are grappling with – particularly in energy intensive industries.
Here we look at five key areas of focus for 2025.
1. Are you checking your EII eligibility status regularly?
We know that too many manufacturing businesses are missing out on substantial savings on their energy costs, and it is taking a toll on margins.
The entry requirements for the EII scheme have been adjusted in the past year enabling many more businesses to qualify. If your business previously did not qualify for the scheme, this could now be your opportunity to join and save.
Right now there’s more reason than ever to check if you qualify for the savings this scheme can deliver – not least because the financial gain has increased – and we’d recommend reviewing your eligibility at least once a year.
2. Ensure you are protected in an uncertain energy market
While the extremes of energy price fluctuations may be behind us for now, we are going into 2025 with a significant degree of volatility in energy markets – not least due to a somewhat fractious geopolitical landscape.
This presents an opportunity to evaluate your energy purchasing strategy and determine if you are on the right course to protect your business for the longer term. For energy intensive manufacturing businesses, this could mean switching from a fixed price energy contract to risk-managed purchasing.
3. Don’t miss the Climate Change Agreements window for new sites
In May 2025, the scheme will be re-opening to new sites that are not currently covered by a CCA. If your organisation has expanded, it is vital that you don’t miss this short window of opportunity to secure these savings.
Introduced in 2001, CCAs are voluntary agreements between organisations and the UK Government to encourage more energy efficient behaviours.
The scheme enables eligible participants to receive a discount on their climate change levy (CCL), a tax paid mainly on electricity and gas, while being measured against energy efficiency targets.
4. Time to Act on ESOS
5th March is the deadline for submitting ESOS Action Plans, with scheme participants facing enforcement measures if they fail to do so. This is an extension to the official deadline of 5th December 2024, and the Environment Agency is encouraging organisations to submit plans that include a wide range of initiatives.
Now is the time to focus on ensuring your Action Plan is ready and includes the following:
- Specific actions to be implemented, with clear timescales and deadlines
- Estimated energy savings, backed by data sources
- A breakdown of these savings by organisational purpose e.g. transport, industrial processes, transportation etc.
While there is an option for organisations to file a ‘no action plan,’ having a comprehensive action plan in place can drive energy efficiency in your business, saving energy and costs while helping you meet your ESOS obligations.
5. Carbon Reporting Standards are changing – do they affect your business?
Under the EU Carbon Border Adjustment Mechanism (CBAM), businesses that export to the EU are required to report on their products’ embedded carbon footprint. From 1st January this year, businesses will have to use the “EU methodology” for their reporting.
Corporate Sustainability Reporting Directive (CSRD) – 2025 is the first year where companies who were previously in scope of the Non-Financial Reporting Directive will have to change their reporting framework to align with the CSRD.
The UK-endorsed ISSB sustainability disclosure standards are scheduled for publication in Q1 2025. This will provide the blueprint for all future regulation on sustainability-related reporting and will provide a useful ‘direction of travel’ from which businesses can plan.
The Envantage team is on hand to support you in 2025 in buying, managing, and using energy in the most effective way possible for your business, as well as adopting the most effective decarbonisation strategy.
Get in touch today if you would like to speak to our carbon and energy consultants about any of the issues raised in this article.
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