The governement has dismissed an appeal by coal producer ATH Resources related to its participation in the government's Carbon Reduction Commitment (CRC) scheme, the company said on Friday.
In February, the company received an enforcement notice from the Environment Agency requiring it to register as a participant of the CRC scheme, a corporate carbon reduction programme to reduce carbon emissions of businesses.
Doncaster, South Yorkshire-based ATH said the Secretary of State for Energy and Climate Change had dismissed its appeal against the notice.
If ATH is ultimately compelled to participate in the CRC scheme, the cost to it could be about 1.4 million pounds annually for three years from April 2012, the company said in a statement.
The company posted a full-year pretax loss from continuing operations of 5.8 million pounds.
The CRC is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large public and private sector organisations, which are estimated to be responsible for around 10 percent of the UK's emissions.
ATH's shares were trading down 1.67 percent at 29.65 pence at 0808 on Friday on the London Stock Exchange. They have lost about 29 percent since the beginning of the year.
(Reporting by Brenton Cordeiro in Bangalore; Editing by Roshni Menon)