There are several definitions of what a Carbon Footprint should include but generally a carbon footprint is the total amount of carbon dioxide (CO2) and other greenhouse gases released over the full life cycle of a product or service. For most businesses, it is simply a measure of how much CO2 they use as part of their business cycle such as electricity, gas, coal, gas oil, propane, petrol, diesel and air travel.

Carbon Reduction Commitment is a new Carbon Trading platform set to encompass UK businesses who consume more than 6MWh of half hourly electricity per year. The 6MWh can be made up of several sites within an organisation and therefore it will affect large single sites as well as smaller multi-site organisations. The benchmark year for inclusion into this scheme is 2008 with the carbon trading due to start on the 1st January 2010.

Introduced in April 2001, this taxation is applied to all business paying 17.5% VAT on their gas and electricity and was designed to help the Government raise revenues to help assist in the development of cleaner energy technologies and to encourage businesses to reduce their own consumption levels. Reductions are available for some types of business and in some cases there are complete exemptions. Presently the rates are 0.441p/kWh for electricity and 0.154p/kWh for natural gas.

Previously name Action Energy, the Carbon Trust provides Government funded support to businesses to help identify and reduce their carbon emissions. The support is primarily provided through consultants who can audit energy consumption and deliver recommendations of where savings can be made. Further assistance is provided in the form of interest free loans. The minimum spend requirements for an audit is £50,000 although this can include electricity, gas, and gas oil. For smaller users the interest free loans are still available.

The Manufacturing Advisory Service provides funded one day diagnostic assessments to help businesses reduce their overall expenditure and identify ways to increase profitability. In the Yorkshire and Humber regions, The Utility Forum provide free one day assessments of electricity, gas, water, and telecommunications to help identify areas where consumption can be reduced and costs lowered. MAS also provide free staff training and grant opportunities for CAPEX.

Electricity and Gas prices are traded on the market as commodities and as such are very volatile with prices changing on an hourly basis. The forward curve allows traders, suppliers, and consultants to purchase volumes of energy for the future at today's prices. Buying ahead, for both consumers and suppliers, can prove very beneficial if market prices move upwards but the reverse is also true if market prices fall closer to the actual delivery date. Forward electricity and gas prices can be displayed in a variety of ways, however, the curve is generally regarded as the simplest format.

In-line with the Kyoto (1997) protocol the European Unions Emissions Trading Scheme is designed to combat global warming by encouraging large power consumers to reduce their energy outputs by forcing them to buy permits for the CO2 they release into the atmosphere. The first stage of the EU ETS came into force in 2005 and will last until the end of 2007.

Although large energy consuming companies have been able to purchase their energy in tranches, be that daily, weekly or monthly, there are now opportunities for smaller consumers to benefit from the flexible purchasing arrangements that are in the market place. Flexible purchasing allows for you to buy a certain percentage of your energy needs at a fixed price and leave the remainder floating. The floating element can be purchased on a daily, weekly or monthly basis. Their are risks to this type of contract but a skilled analyst can help in deciding how much to fix and how much to float. Potentially, this type of contract can generate very large savings with compared with a fixed price contract.

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