Carbon reduction
commitment
The bare bones
The CRC Energy Efficiency Scheme is designed to encourage organisations to reduce “carbon” emissions from buildings and to improve their energy efficiency. Transport emissions and the onward supply of energy[1] are not included. It came into force in 2010, administered by the Environment Agency.
Participants
will
have to monitor their energy use and
calculate their annual emissions. They must then buy allowances,
initially at £12
per “tonne of Carbon Dioxide emissions”.
Who is included?
Any organisation which has a “half-hour meter” installed will have to register with the Environment Agency, and its annual energy use will determine whether it is included in the scheme. Half-hour meters are found in all sites which have a peak demand of over 100 kW, and there are about 20,000 of those across the country. If you’re not sure if you have one, ask your energy supplier.
CRC applies initially to around 5,000 large organisations in the public and private sectors which use more than 6,000 Megawatts of energy per annum (about £½ million at today’s prices). It came into effect in April 2010, and includes those which own or occupy large property portfolios: hotels, banks, retailers and property companies, as well as NHS Trusts and most local authorities. This covers not just stand-alone organisations, but also joint ventures, franchises, subsidiaries of overseas firms, landlords who supply energy to their tenants, and venture capitalists – to name just the most important categories. Energy users already covered by a Climate Change Agreement or the EU Emissions Trading System are exempt.
Smaller half-hour meter users do not have to participate fully in the scheme, but must still make a periodic “information disclosure”. However it seems likely that those who consume between 3,000 and 6,000 Megawatts will be drawn into the scheme at a later date.
Are there any costs or benefits?
The scheme is designed to encourage everyone to focus on their energy use without delay. The intention is that by following this process, organisations will reduce their energy bills out of all proportion to the cost of the scheme itself. The base year is 2008, so it is vital to get your records in order now. Registration took place between April and September 2010.
And if I don’t register or participate?
Key penalties include
Not registering by the deadline: an immediate fine up to £5,000, plus £500 per working day of delay
Not reporting: £5,000 fine, plus 5p/tCO2/day up to 40 days, then doubled
Not buying enough allowances: you must purchase more allowances, with a £40/tonne penalty.
It will pay you to comply!
As with all such developments, it is important to start collecting your records and planning energy efficiency improvements now, and begin reap the benefits of increased efficiency and lower costs…
Charnock-Environmental advises organisations on the CRC: www.charnock-environmental.co.uk
[1] Energy which participants generate but supply to others – e.g. electricity or heat.
[2] The league table will be an annually published list of participants’ carbon performance. Initially this will be based on progress towards the Carbon Trust Standard and the installation of automatic meters, and later on year-on-year efficiency improvements relative to turnover.