Organisations get a year's grace before having to pay for carbon emissions

The government is to delay the introduction of trading under its Carbon Reduction Commitment programme by a year it was announced today.

The scheme, which aims to reduce carbon emissions from organisations which use in excess of 6,000MWh of electricity – around £500,000 plus - a year, comes into force in April 2010.

The original plan had been to sell carbon emissions allowances to organisation based on their energy use in 2008.

However, now the Department of Energy and Climate Change has said that "to smooth the introduction of the scheme and ease the upfront costs" organisations will only have to report emissions in the first year (2010-2011) without having to buy the allowances.

After this time organisations will have to surrender sufficient allowances to cover the amount of CO2 they have emitted. Those whose emissions fall below the 2008 levels will be entitled to sell their excess allowances while those that exceed their quota will be obliged to buy surplus allowances.

Other details released by the department on how the scheme will operate include recognition for organisations that use on-site renewable energy and extra weighting in the second year of the scheme for those who take action early to improve energy efficiency.

By 2020 the scheme is expected to have delivered emissions savings of at leat 4.4 million tonnes of CO2 a year.