Carbon Trust has had limited impact

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The National Audit Office found that only 12% of large businesses have worked with the Carbon Trust to reduce their CO2 emissions and just 40% of the potential savings identified by the Trust between 2003 and 2006 have actually been implemented.

The Carbon Trust was set up in 2001 as a private company with the remit of encouraging reductions in CO2 emissions across the UK and accelerating the transition to a low-carbon economy. It received £103.2 million in public money in 2006/07 to support its work.

An NAO report found it had helped UK businesses and public sector organisations reduce their emissions by an estimated two million tonnes in 2006/07 - with a financial saving to the bodies involved of £410-£655 million.

The Trust is "likely" to live up to expectations that it could bring about a 4.4 million-tonne reduction by 2010, said the NAO.

But the report said that 60% of organisations that worked with the Trust implemented fewer than half of its recommendations, mainly because of competing investment priorities and difficulties securing commitment to CO2 reductions at a senior level.

Involving more companies with the Trust could lead to "much greater reductions in carbon dioxide emissions", said the report.

Sir John Bourn, head of the National Audit Office, said: "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 Government has a target of reducing CO2 emissions by 20% from 1990 levels by 2010, bringing the total produced by the UK down from 592 million tonnes a year to 474 million.