On 20th October 2010, the UK Government announced that "The CRC Energy Efficiency scheme will be simplified to reduce the burden on businesses, with the first allowance sales for 2011-12 emissions now taking place in 2012 rather than 2011. Revenues from allowance sales totalling £1 billion a year by 2014-15 will be used to support the public finances, including spending on the environment, rather than recycled to participants. Further decisions on allowance sales are a matter for the Budget process."
The implications of this announcement for CRC are:
The proposed changes to the CRC are currently under consultation process, the results of which will be published in early 2011. If the above changes are implemented then this will mean a significant changes to the scheme. If you are worried about the changing nature of the CRC and how this will impact your organisation, then please contact Inteb for further information.
The Carbon Reduction Commitment Energy Efficiency Scheme (CRC EES) is the new and mandatory UK government scheme designed to reduce UK businesses' energy use and carbon emissions. The scheme is now up-and running and if companies do not meet the mandated requirements of the scheme fines will be imposed of in excess of £40,000.
The scheme applies to the 5,000 plus organisations in the UK that consumed more than 6,000 Mega Watt Hours of electricity between January 2008 and December 2008. This translates to around a £500K spend on energy per year. It is also important to understand that qualification is based on electricity usage, although once an organisation is in the scheme, the CRC EES covers a wider range of energy sources. Even an organisation which uses only 3,000 Mega Watt Hours of electricity (or circa £250k spend) will need to make an information disclosure and will face fines if it doesn't.
The deadline for registration is 30th September 2010. It will then be necessary to purchase carbon allowances or credits to 'offset' carbon emissions; these will be priced at £12 per tonne of carbon. The success of an organisation's energy / carbon emission reduction strategy will also determine its place in a national league table published in the national press and trade magazines.
The CRC EES puts the issue of carbon management into the board room. A senior director has to sign off and coordinate the management of the CRC EES. If an organisations fails to comply repeatedly, this will be treated as a criminal offense; highlighting the importance of early action on behalf of organisations.
The league table displays the performance of CRC EES participants for a specific year, based on metrics for that particular compliance period. Performance within the league table is relative to other CRC EES participants. Reputational influences on the organisation are therefore a key driver for the scheme. At the start of the scheme performance is influenced heavily by the Early Action Metrics, which aim to reward firms who have already achieved the Carbon Trust Standard and installed AMR meters.
The CRC EES aims to target 10% of the UK's emissions, capturing non-heavy industries that are not covered by the European Union Emissions Trading Scheme. The driver for the scheme is to help the UK reduce its greenhouse gas emissions by 20% by 2020, and long term target of an 85% reduction by 2050.
The CRC EES started in April 2010 and the introductory phase runs until April 2013. During each CRC EES year organisations have to forecast their emissions and purchase allowances to cover this. At the end of each year they must submit annual emission reports, and maintain evidence packs for audit purposes.
If you need help navigating this complex legislation, Edward Turner from Inteb, is an expert in the CRC EES. If you have any doubts or queries please email Edward on Edward.Turner@inteb.co.uk or call 0151 346 2131.