Carbon Reduction Commitment (CRC)
STOP PRESS
The first year of allowance payments in the CRC has now been deferred until April 2011. This means that the April 2010 deadline still stands but no allowances need to be purchased in October. This effectively provides a ‘dry run’ for organisations to understand the potential budgetary implications of the scheme for the following years planning.
What is the Carbon Reduction Commitment (CRC)?
The Carbon Reduction Commitment (CRC) is effectively a tool to make larger organisations offset their carbon emissions and to demonstrate that as an organisation you are making an ongoing effort to reduce your carbon footprint.
If the electricity spend across all of your organisations sites is over £500,000 a year, or in energy terms over 6000 MWh per year, you must comply with the governments new mandatory carbon emissions reduction scheme, the Carbon Reduction Commitment (CRC).
If you are a landlord covering your tenant’s energy cost through a service charge and you own multiple sites, you could also be liable. For example, if you have a portfolio of 30 office buildings averaging 10,000 square feet and the electricity supply contract is in your name, you will most likely be over the CRC compliance threshold.
When does it start?
In the summer of 2009, any site with a Half Hourly Meter (HHM) settled on the on the half hourly market (about 20,000 sites) will receive an information pack from the environment agency. If you are eligible for the scheme you will need to make a submission, if you are under the threshold, you will still need to make an information disclosure. The scheme begins in April 2010 and your eligibility is based on your energy consumption for 2008.
Download PDF of CRC timeline here>
How does it work?
If you are eligible, you are effectively part of a national league table, where the worst offenders (highest energy users) are shamed by being at the bottom of the league. Higher performers have a percentage of the revenue gained by the scheme ‘recycled’ to them, thus significantly lowering compliance costs.
Participants of the scheme can increase their positioning in the league table by showing the environment agency that you are proactively reducing your carbon footprint, by gaining Carbon Trust Standard Accreditation and by installing automatic meter readers (gas and electricity).
What do I need to do?
WM Energy will help your company establish your position with the CRC and will guide you through the application process. If you have already begun working towards your CRC readiness, it is beneficial to implement energy efficiency measures prior to your first year’s submission in order to reduce your carbon exposure, which at £12 per tonne can be significant.
As the CRC is an ongoing scheme, the targets will become harder and the competition in the league table will become stiff. Your organisation will need to do the following to be competitive.
• Install Automatic Meter Readers (smart meters) before March 2011 – Read more>
• Gain Carbon Trust Standard Accreditation as soon as possible (it can take three years to achieve accreditation) – Read more>
• Establish comprehensive monitoring and data management procedures with appropriate software – Read more>
• Continue to identify, document and implement energy efficiency opportunities and hence further reduce emissions – Read more>
What are the penalties for non-compliance?
There are various penalties, for example failure to register will cost your organisation a £5000 fine plus £500 per day of non-compliance. Falsification of data and attempts to deceive the CRC can result in prison sentences.
WM Energy offers a comprehensive set of tools to help you manage your CRC application and your ongoing compliance; we can install Smart Meters from as little as £50 per meter, can manage your application for the Carbon Trust Standard and can continue to work with you in reducing your energy usage.
WM Energy’s ‘Meridian’ software is also essential for CRC participants for the ongoing management of data and preparation for audit.
Download the CRC user guide here>
For further information please call us to discuss your needs on 0207 378 5800 or email us.
