Businesses should beware of the “green tariffs” offered by some electricity suppliers as they may be less green than they appear, industry experts have warned. Businesses are increasingly seeking to burnish their environmental credentials by signing up for the tariffs, under which electricity companies promise to derive a certain proportion of the electricity they sell from renewable or other low-carbon sources. Demand for the deals, which often charge users a significant premium for the cleaner energy, has outstripped supply in the past year. Household names such as BT, HSBC and Marks and Spencer are among companies that have signed up.

But Harry Morrison, senior strategy manager at the Carbon Trust, a government-funded body charged with helping companies cut their greenhouse gas output, recently was quoted in the Financial Times that many so-called green tariffs could include a high proportion of “brown” energy derived from fossil fuels. Mr Morrison advised businesses to examine their use of the tariffs carefully to avoid possible reputational damage from making green claims based on false information. He said: “We say be aware of the problems and if you intend to use these tariffs to make an environmental claim you are taking a risk, as maybe your tariff is not as green as you thought it was.” There was also concern that electricity suppliers might be “double counting” their renewable energy - in effect, selling the same megawatt hours of renewable energy to more than one customer, Mr Morrison said. Ofgem, the power industry regulator, is expected to publish a set of voluntary guidelines for the electricity industry, which would give green tariffs an “energy rating” depending on the mix of brown and green electricity they supplied. Meanwhile, businesses face continuing uncertainty over the tariffs.