Industry demands CRC alternative for datacentre operators

New legislation that came into force on 1 April could force more datacentres abroad and lose vital jobs for the UK workforce, bodies claim

Carbon reduction: The BCS and Intellect UK are investigating how to protect data centre operators business interests

Two IT industry bodies are pooling resources to prevent UK datacentre operators from losing business because of the Carbon Reduction Commitment (CRC).

The legislation, which came into force on 1 April, requires firms to buy allowances for their annual carbon emissions. Charges are capped at £12 per tonne and the worst offenders will be “named and shamed” in an energy-efficiency league table.

BCS - The Chartered Institute for IT, and Intellect UK are currently looking into whether obtaining a Climate Change Agreement (CCA) would be an “appropriate option” to protect the business interests of datacentre operators.

Liam Newcombe, secretary of the BCS Data Centre Specialist Group, said: “The combination of a published league table and increasing financial penalties creates a strong driver to outsource datacentres to a third party.

“It also creates direct pressure to offshore existing or new datacentre capacity, creating a direct risk to value and skills in the UK.”

A CCA would provide datacentre operators with up to an 80 per cent decrease in the tax paid as part of the Climate Change Levy (CCL) scheme in return for meeting certain energy efficiency targets.

Newcombe said, if approved, the agreement would not provide “an exemption from the CRC”, but would provide an “alternative mechanism” to govern the energy efficiency of datacentres.

He added: “Any CCA would constitute a negotiated agreement between datacentre operators and government to manage and improve datacentre efficiencies.”

Michael Ourabah, international business development director at datacentre operator BSO Networks, said CCA approval is more likely to be granted than an outright exemption from the CRC.

He added: “I do not think [an exemption] would be viable because what is to stop every other industry from campaigning to be let off from the CRC instead.”