01/02/2010
Get ready for carbon reduction legislation

CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment)

• CRC is the UK’s mandatory climate change and energy saving scheme, due to start in April 2010
• Aims to improve energy efficiency and reduce carbon dioxide (CO2) emissions, as set out in the Climate Change Act 2008, designed to tackle CO2 emissions not already covered by Climate Change Agreements and the EU Emissions Trading Scheme
• Designed to raise awareness in large organisations and encourage changes in behaviour and infrastructure
• Will operate as a ‘cap and trade’ mechanism, providing financial incentive to reduce energy use by putting a price on carbon emissions from energy use - organisations buy allowances equal to their annual emissions
• The overall emissions reduction target is achieved by placing a ‘cap’ on the total allowances available to each group of CRC participants - within that overall limit, individual organisations can determine the most cost effective way to reduce their emissions (buying extra allowances or investing in ways to decrease the number of allowances they need to buy)
• All money raised through the allowances will be recycled back to participants, according to how well they perform – the scheme encourages organisations to develop energy management strategies that promote better understanding of energy usage
• The scheme will cover large public and private sector organisations responsible for about 10% of UK’s emissions – will affect around 200,000 organisations
• Organisations are eligible for CRC if (and their subsidiaries): 1. they have at least one half hourly electricity meter (HHM) settled on the half hourly market and 2. their total half hourly electricity consumption exceeded 6,000 megawatt hours (MWh) during 2008
• Initially it is estimated 5,000 organisations will qualify and be required to comply with CRC, including supermarkets, water companies, banks, local authorities and all central Government Departments. These organisations have to comply legally with the scheme or face financial and other penalties
• DECC has developed the CRC policy in partnership with the Scottish Government, the Welsh Assembly Government and the Department of Environment Northern Ireland.

More about DECC

When the CRC Energy Efficiency Scheme starts organisations will be required to:

• Register as a participant in the scheme
• Pay the registration fee of £950 – in subsequent years there will be an annual subsistence fee
• Measure and record their business energy use (ie. electricity, gas, fuel oil, coal, liquefied petroleum gas etc) and calculate carbon dioxide (CO2) emissions annually
• Buy allowances corresponding to their emissions from energy use, surrender allowances equivalent to their energy use at the end of the year, and trade allowances with other businesses if they have bought too many or too few allowances
• Submit an annual report on their emissions
• Submit a footprint report online
• Surrender allowances equivalent to emissions
• If CRC applies to an organisation and they fail to register between 1 April 2010 and 30 September 2010, they can be fined £5,000 plus a further £500 for each working day not registered after 30 September 2010

More about the legislation

Press Release – One month until Energy Efficiency Scheme starts – Government scheme to save organisations £1billion and more than 4MtCO2 each year by 2020 – View full press release.