Pictured above: David Tonks, DTZ

The Government's Carbon Reduction Commitment (CRC) energy efficiency scheme will lead to a sea-change in office occupier decision-making, according to a Birmingham property specialist.

David Tonks, head of office agency at DTZ, believes that rental values will take a back seat to emission levels when the CRC gets underway from April 2010.

The CRC Energy Efficiency Scheme is a mandatory carbon emissions reduction scheme for the UK. It will act as an incentive to improve energy efficiency and will help large private and public sector organisations generate cost savings through reduced energy bills. It is estimated that the scheme will save organisations £1bn and more than four million tons of CO2 each year by 2020.

Pictured above: Calthorpe House

David Tonks said: "In my view, this far-reaching scheme will change for ever the way we do business. Occupiers will focus intently on how efficiently a building runs, rather than comparing rental prices per square foot, with the result that modern, Grade A property will be even more attractive than before.

"Nowhere is this more obviously exemplified than at Calthorpe House, the first property in central Birmingham to receive a BREEAM 'excellent' rating, and which has provided a benchmark for others in the city to follow."

Under the CRC, organisations whose annual half hourly metered electricity use is at least 6,000 Megawatt hours will qualify for the scheme - typically those that spend £500,000 a year on electricity. Around 5,000 organisations in the UK will be affected, representing an estimated 25 per cent of total business sector emissions. The scheme covers both electricity use and direct emissions from energy use including gas and fuel oil.

From April 2010 qualifying organisations will need to register on the CRC, measure and record energy use and calculate carbon dioxide emissions then provide annual energy data online. They will be able to buy allowances, corresponding to emissions at £12 per ton of CO2. At the end of the year they will be able to trade allowances with other businesses if they have bought too many or too few.

The Department of Energy and Climate Change has now published (7 October) its response to consultation on the scheme and as a result has announced some improvements.

To smooth the introduction and help ease upfront costs, organisations will only have to report emissions in the first year (2010/11). In subsequent years, organisations will have to buy allowances corresponding to their emissions from energy use, and then surrender them by the end of the year. In the second year (2011/12) extra weighting will be given to organisations which take action early to improve energy efficiency. Recognition will be given to organisations which use onsite renewable energy like wind turbines or solar panels by publishing the increased carbon savings from such measures.

Tonks continued: "It's clear that the time for talking is over.  The Government is committed to the UK moving to a low carbon economy and the CRC is designed to help large public and private sector organisations make significant headway in reducing their energy consumption.

"Inevitably, these larger organisations will congregate in better quality space, which will be more easily differentiated from tertiary product than previously. Landlords and investors with property holdings which are anything less than efficient need to implement improvements now if they are to be ready for this new world order.

"There are plenty of simple improvements that can be made, from movement-activated lighting, more efficient heating and cooling systems to installing solar panels or wind turbines on the roof.

"Anyone believing that the 'green' agenda is still on the 'nice to have' list is sadly mistaken."