The Carbon Reduction Commitment (recently renamed the CRC Energy Efficiency Scheme) has now officially started.
Will the new Carbon Reduction Commitment affect you?
The scheme is designed to tackle CO2 emissions from large public and private sector organisations, who are responsible for about 10 percent of the UK’s emissions. The scheme, which targets UK organisations that used over 6,000 MW/h of half hourly metered electricity and gas during 2008, aims to save four million tons of CO2 a year. That's the equivalent of taking one million cars off the road.
The CRC will affect between 5,000 to 20,000 organisations including supermarkets, water companies, banks, local authorities and all central Government Departments - and yours could be one of them. Qualifying organisations will have to comply legally with the scheme or face financial and other penalties. In doing so, it is anticipated that the scheme will affect 25% of total business sector emissions within the UK.
If your total utility bill is over ₤ 350,000 / € 385,000 then your business will probably be affected by the Carbon Reduction Commitment.
How will the CRC work?
The CRC will be a bonus and penalty scheme, with those organisations making the most improvements in energy efficiency receiving financial rewards. So, organisations in the top half of the 'league table' will be paid a bonus, and those in the bottom half will be charged a penalty.
However, If your organisation had at least one half hourly electricity meter (HHM) settled on the half hourly market in the qualification year 2008, but your total qualifying electricity supplies through all HHMs (i.e. both settled and non-settled supply and dynamic supply) was less than 6,000 MW/h, you must make an information disclosure under CRC.
The aim of the CRC is to reduce the level of carbon emissions currently produced by the larger 'low energy-intensive' organisations by approximately 1.2 million tonnes of CO2 per year by 2020. As a Climate Change Bill commitment, the scheme is aiming for a 60% reduction in CO2 emissions by 2050.
The Carbon Reduction Commitment will cover both public and private sector organisations. The scheme will work in tandem with the existing European Union Emissions Trading Scheme and Climate Change Agreements. As a result, where emissions have been captured by the EU ETS and CCA, these emissions will not be captured by the CRC. In essence, the CRC is targeted at low energy-intensive users. The Climate Change Bill also sets the enabling powers for the Carbon Reduction Commitment and sets out the role of the Climate Change Committee that will oversee much of the CRC scheme.
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