CRC - Energy Efficiency Scheme

About the Scheme

The CRC (Carbon Reduction Commitment) Energy Efficiency Scheme (the CRC Scheme) was brought into law in April 2010 through the CRC Energy Efficiency Scheme Order 2010 (as amended). It is a UK wide mandatory trading scheme, aimed at improving energy efficiency and cutting carbon dioxide (CO2) emissions in large public and private sector organisations including, supermarkets, hotel chains, government departments and large local authority buildings.

These organisations are responsible for around 10% of the UK’s emissions.

The CRC Scheme targets emissions and energy use from large non-energy intensive organisations in both the public and the private sector whose annual mandatory half hourly metered electricity use is above 6,000MWh – focusing on those emissions outside the Climate Change Agreements (CCAs) and outside the direct emissions covered by the EU Emissions Trading System (EU ETS).

By driving energy efficiency, the CRC will deliver emissions reductions cost-effectively, saving participants money, and enabling sustainable growth. This will yield a benefit to participants of £1billion by 2020. Performance in the scheme will  be made public, adding a reputational incentive for participating organisations.

Qualifying organisations will have to comply legally with the scheme or face financial and other penalties.

Further information and queries on the Carbon Reduction Commitment

If you have any queries on the CRC Energy Efficiency Scheme, please direct them to the Scheme Administrator, at the Environment Agency, here.

CRC Simplification Proposals

Proposals to make the CRC Energy Efficiency Scheme simpler, easier and more straightforward have been outlined by the Department for Energy and Climate Change (DECC).

Following recent discussions with businesses, industry and regulators the new proposals will result in a CRC scheme which:

• is a simpler policy, reducing administrative burden on businesses;
• provides greater certainty to participants about their CRC scheme liabilities;
• allows greater flexibility for businesses in how they take part; and
• reduces the overlap between the CRC and other government climate policies.

The proposals will be formally consulted upon early next year.

Amongst the simplifications, it is proposed to:

• reduce the number of fuels covered by the scheme

Under the current scheme businesses have to report on the emissions from 29 different fuels, but because approximately 95% of emissions captured under the CRC come from electricity and gas, businesses would need to report on just four. Kerosene and diesel for heating would also be included. This could significantly reduce administration burden without compromising the emissions coverage of the scheme.

• move to fixed price allowance sales

Instead of establishing an emissions cap and holding annual auctions, like the EU ETS, from the start of phase 2 in 2014 there could be two sales per year where the price of allowances is fixed. This would remove the need for businesses to come up with auctioning strategies and give price certainty to help investment decisions.

• simplify the organisational rules

Abolish the need for large businesses to participate in groups which do not reflect their natural structure.

• make qualification processes easier

To make qualification a one step process instead of two. Previously businesses had to firstly prove they had a qualifying electricity meter and then declare they used a particular amount of electricity. This would be abolished in favour of participants just having to prove they use a certain amount of electricity from the qualifying meter.

• reduce overlap with other schemes

Any CCA or EU ETS site would be automatically exempt from the CRC scheme.

Full details of the proposed simplifications to the CRC Scheme can be found here.

An awareness event for Northern Ireland participants was held on 15 May 2012. The presentations are attached.

CRC - final NIEA presentation - 15 May 2012 (Power Point presentation 4.2MB)

CRC Seminars 15 May 2012 - DECC presentation Northern Ireland CRC presentation (Power Point presentation 689KB)

CRC - final NIEA presentation - 15 May 2012 (Power Point presentation 421KB)

FURTHER INFORMATION

Further information on climate change responsibilities in Northern Ireland can be requested by contacting:

Climate Change Team
Department of the Environment
Goodwood House
44 - 58 May Street
Belfast BT1 4NN

Tel.: (028) 90 254 781.

E-mail: climate.change@doeni.gov.uk

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