A new scheme to drive down carbon emissions from big businesses and organisations goes live today, amid concerns some companies are not clear on what they need to do to meet the requirements.

The Carbon Reduction Commitment will require businesses, government departments and public sector organisations such as hospitals which use more than around £500,000 a year of energy to buy “allowances” to cover their carbon emissions.

The scheme, which will require around 5,000 organisations in the UK to participate, will rank the organisations according to the efforts they are making to be more energy efficient - with the top businesses rewarded and the worst penalised.

It is one of two schemes launched today to reduce emissions in the UK, alongside the “feed-in tariffs” initiative that will pay people a fixed amount for electricity they generate from small-scale renewable power such as solar panels or wind turbines.

Energy and climate change secretary Ed Miliband said: “From today, the rewards for businesses and householders who act to cut their carbon emissions really start to pay off.

“It’s no longer simply about doing the right thing for the environment, it’s now a sure-fire financial investment.

“Organisations and householders can play a central role in leading the move to a low carbon economy whilst saving money on their energy bills.”