The CRC Energy Efficiency Scheme is a mandatory emissions trading scheme which aims to improve energy efficiency and reduce the amount of carbon dioxide emitted in the UK.
Who does it apply to?
The scheme will apply to organisations consuming at least 6,000 MWh of electricity measured on half hourly meters (generally when electricity bills are over £500,000 during the qualification year in 2008).
It applies to groups of companies and the highest parent organisation or a nominated company (the primary member) will be responsible for compliance by the whole group, including all subsidiaries.
Timing
CRC came into force in April 2010 and the first introductory phase will run until March 2013.
Organisations which qualify for CRC had to register by 30 September 2010 and will need to submit a report on their emissions for the scheme year, which started in April 2010.
Registration for the second phase will be based on energy consumption for April 2010 to April 2011 and registration for this will have to be done between April and September 2013.
Under the CRC Order from April 2011 organisations should purchase allowances reflecting the expected amount of their emissions at the beginning of a scheme year in April (one allowance per tonne of CO2 emitted, initially sold by the government at £12 each). They will then surrender the right number of allowances at the end of the scheme year when submitting their report. However, the Government’s Comprehensive Spending Review (CSR) on 20 October 2010 stated that the first sale of allowances would be held in April 2012 and would be retrospective in respect of 2011/2012 emissions.
From the second phase which starts in 2013 the current position is that the number of allowances will be capped and allowances will be sold by auction, which will lead to increased costs. However, the report published by the Committee on Climate Change on 24 September 2010 recommended that the Phase 1 sale of allowances at a fixed price continues into Phase 2.
Download a printable version of the CRC timetable.
League table and recycling payment
Participants will be ranked in a league table according to how their emissions have reduced, which will have an impact on their reputation.
The CRC Order also provides for the distribution of the money received from allowances back to participants each October (the “recycling payment”), based on participants’ emissions reductions and their position in the league table. However, the Government’s announcement on CRC in the CSR stated that the recycling payment would be abandoned, effectively introducing a tax element to the CRC.
Contact Us
For further information or advice on the CRC Energy Efficiency Scheme, please speak to one of our CRC specialists or to your usual Linklaters contact.
