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• The Carbon Trust: Innovation and Investment. A report for the NAO by Morgan Harris Burrows (532 KB)

The Carbon Trust helped UK businesses and public sector organisations reduce their carbon dioxide emissions by up to an estimated two million tonnes in 2006-07 according to a report out today by the National Audit Office. And its support of emerging low carbon technologies could lead to further sizeable reductions in the future.

The Carbon Trust, set up in 2001, is a private company with a remit to cover the UK. It used £103.2 million in public money from central government departments and the devolved administrations in 2006-2007. Today’s report looked at the cost-effectiveness of the advice given to businesses and public sector organisations by the Carbon Trust and its programme to encourage the development of low carbon technologies.

The report found that the Carbon Trust is likely to meet the expectation set out in the Climate Change Programme 2006 that its actions will result in an annual reduction in carbon dioxide emissions of 4.4 million tonnes by 2010 on levels in 1990. The direct monetary benefit to organisations that the Carbon Trust worked with in 2006-07 is estimated to be between £410 million and £655 million over the life time of the carbon savings; more than double the costs the organisations incurred in taking up Carbon Trust recommendations. On this basis the Carbon Trust’s advice to business has proved value for money and its Innovation Programme appears to be on course to do likewise.

The report also found that the Carbon Trust has built a strong brand image in the UK. Some 53 per cent of businesses in 2006 were spontaneously aware of the Carbon Trust and its role in helping reduce carbon emissions. Over 80 per cent of the organisations that worked with the Trust to reduce their carbon dioxide emissions were satisfied with the service they received.

However, the report found that organisations could achieve greater reductions in carbon emissions, as less than 40 per cent of the carbon savings identified by the Carbon Trust between 2003 and 2006 have so far been implemented.

Some of the Carbon Trust’s recommendations are deliberately challenging in order to encourage organisations to undertake more ambitious energy saving initiatives. But the NAO found that 60 per cent of organisations had implemented fewer than half of the recommendations made. The main barriers were competing investment priorities and difficulties in some organisations securing senior management commitment. The report recommends the development and expansion of the Carbon Trust’s Energy Efficiency Accreditation Scheme so organisations can demonstrate that they are taking climate change seriously.

Only 12 per cent of large businesses with annual energy bills over £50,000 have worked with the Carbon Trust to reduce their carbon dioxide emissions. Working with more organisations and increased implementation of good practices could generate much greater reductions in carbon dioxide emissions. However, any large change in take up without a corresponding increase in government funding depends upon companies being willing to pay for advice. The NAO recommends that the Carbon Trust should explore the potential of a franchise model enabling accredited third parties to offer organisations paid-for advice.

The Carbon Trust has developed strong expertise in developing low carbon technologies which it estimates could lead to annual savings of between 13.7 and 20.7 million tonnes of carbon dioxide emissions by 2050. Its support of low carbon technologies has raised around £2 of private sector investment for every £1 it has committed to its Innovation Programme, and around £10 for every £1 it has committed to its venture capital investments.

The Carbon Trust’s Research and Technology Accelerators appear to be well designed to accelerate the development of commercially viable low carbon technologies. However, in order to further accelerate the development of new technologies which could reduce carbon dioxide, the NAO recommends it needs to build stronger links with overseas organisations to collate better information on international progress in developing such technologies.

Sir John Bourn, head of the National Audit Office, said today:

“Climate change presents very serious global risks. The Carbon Trust has done a good job at persuading businesses and public sector organisations to start tackling the problem and its work to date has proved value for money. Its achievement in reducing carbon dioxide emissions in 2006-07 by up to two million tonnes is commendable, but it is a small one in view of the scale of the challenge ahead. The Carbon Trust needs to build on its good work and extend its drive to encourage business leaders to review the carbon footprint of their organisation and to take decisive action to reduce carbon dioxide emissions.”

Notes for Editors:

1. The Carbon Trust uses accredited energy efficiency consultants to work with organisations with energy bills of more than £50,000 a year. The services provided include reports with costed recommendations on how the recipient organisations might reduce their carbon dioxide emissions and energy consumption, services supporting the implementation of recommendations, and technical advice on the design and implementation of more complex projects.

2. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk Hard copies can be obtained from The Stationery Office on 0845 702 3474.

3. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.