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Carbon Reduction Commitment (CRC)

Ready for the Carbon Reduction Commitment Energy Efficiency Scheme?

The UK Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is firmly on the agenda of many board meetings today.

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What is the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme?

The CRC is a UK mandatory cap and trade scheme proposed to cut carbon emissions by 1.2 million tonnes of carbon per year by 2020.

The key is energy efficiency and the reduction of emissions. Organisations will have to devise a carbon abatement strategy, consider energy efficient measures, monitor, assess and manage their carbon emissions.

Who is affected?

The CRC is targeting large non-energy intensive private and public sector organisations within the UK, whose combined electricity use through half hourly metering exceeds 6,000 MWh per year. Approximately 5,000 organisations with an energy spend greater than £500,000 will be obligated to take part.

Are there any exemptions?

Emissions covered within the EU-ETS (EU Emissions Trading Scheme) and CCA’s (Climate Change Agreements) are exempt. Subsidiary organisations with over 25% of their emissions within CCA’s will be exempt, but not the whole CRC organisation.

Is it the law?

Regulations are expected to be published shortly. These will be tabled in Parliament to follow the Climate Change Act, having received Royal Assent on 26 November 2008. Currently the CRC's third consultation is being reviewed.

When does the Carbon Reduction Commitment start?

A 3 year introductory phase will begin in April 2010, however actions will be necessary during 2009. Qualification for the scheme will be based on an organisation’s total half hourly electricity usage over the full calendar year of 2008.

What this means to your business?

It is likely to cost a business a minimum of £40,000 to purchace their allowances in April 2011's first sale, and more if your energy usage is greater than 6,000 MWh per year. Added to this a low league table position will lead to further penalties.

You need to prepare your organisation for the CRC by making an early assessment of your carbon emissions via a Carbon Footprint Appraisal, and then start reducing them.

By reducing energy & CO2 you will

Save operational costs
Avoid punitive charges
Have an opportunity to trade your carbon savings into real profit
Gain marketing differentiation & advantage