Carbon Trading announcement and £30 million for public sector energy improvements: Benn

All central Government departments will be included in a pioneering emissions trading scheme that will also target emissions from large businesses including supermarkets, banks, hotel chains and department stores, Environment Secretary Hilary Benn said today.

The Carbon Reduction Commitment (CRC), scheduled to begin operation in 2010, is a mandatory emissions trading scheme that will cover around 5000 public and private organisations, including government departments, retailers, banks and local authorities, which combined account for 10 per cent of the UK economy's emissions.

Mr Benn also announced that public sector bodies in England, including local authorities and hospitals, would be supported in becoming more energy efficient through an extra £30 million over three years in interest-free loans for energy efficiency projects.

Mr Benn said: "The Government has to show it's serious about reducing CO2 emissions. This means the public sector improving the energy efficiency of its buildings - and doing this quickly. Extending the Carbon Reduction Commitment shows our commitment to tackling public sector emissions and playing our part in building a low carbon Britain. "It won't be easy for all organisations in the public sector to cut their emissions quickly - even though they'll be saving taxpayers' money in the long run by reducing energy bills. That's why we're making £30 million in interest- free loans available to help these organisations take up energy efficiency measures quickly."

The further funding for public sector loans, to be delivered by Salix Finance, forms part of the Government's £400 million domestic Environmental Transformation Fund. The Fund invests in the demonstration and deployment of low carbon energy and energy efficiency technologies in the UK, to help reduce emissions and improve the security of energy supply. This builds on an existing fund of £21 million in loans, which have already helped 100 public bodies including schools, hospitals and local authorities, and funded nearly 1000 projects.

The Government today published its response to over 200 public and private sector organisations who wrote in during the consultation period on the Carbon Reduction Commitment. The scheme, designed to save at least 4 million tonnes of CO2 per year by 2020 - the equivalent of taking more than a million cars off the road - will be implemented through the Climate Change Bill, which is currently going through Parliament.