A new scheme to cut carbon emissions from big businesses and other organisations has come into effect.

The Carbon Reduction Commitment (CRC) initiative will require large firms and public sector bodies to buy allowances to cover their energy use.

About 5,000 organisations are having to participate in the scheme, which will see the most efficient rewarded and the least efficient penalised.

A survey by NPower said almost half of firms did not know what was required.

Speaking to 300 companies, the energy group said 49% did not understand what was involved in buying carbon allowances.

A further 44% said the level of advice on the CRC initiative had been inadequate.

A separate study by accountants PricewaterhouseCoopers says the most energy inefficient firms could see their energy costs rise by 20% over the next five years, while the best performers may see bills fall by more than 8%.