Carbon Reduction Commitment

What is the Scheme Designed to do?

The scheme has been designed to tackle emissions not already covered by Climate Change Agreements or the EU ETS

Who does it Affect?

CRC or Carbon Reduction Commitment is now referred to as the CRC Energy Efficiency Scheme and from 2010 businesses that have at least one half hourly electricity meter settled on the half hourly market and during 2008 consumed more than 6000 megawatt-hours of electricity will be affected. It is expected to affect over 20,000 organisations

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What is the reason for its Introduction?

The idea of the system is to improve energy efficiency in business. It will operate as a ‘cap and trade’ mechanism providing a financial incentive to reduce energy use by putting a price on carbon emissions generated by energy use.

Companies and public sector organisations can buy allowances equal to their annual emissions and the overall emissions reduction target is achieved by placing a cap on the total allowances available to each group of participants in the scheme.
Within that overall limit, it is up to individual firms to work out the best way of being compliant – either by buying extra allowances or investing in greater energy efficiency measures.

Does everyone know about CRC?

70% of top management are not aware of the CRC and 87% of employees are unaware. The feed back being received is that energy managers and sustainability managers are very focused, but the board is not.

The idea of the CRC is to bring energy to the board’s attention, so hopefully when you pitch to your finance director and say ‘I want this bit of kit which will have this impact on our energy consumption‘ - you will get a straight yes.

The CRC is something the Finance Director will have to be on top of– but a lot of businesses do not realise they have to prove they are not in the CRC. They assume it is simply a ‘yes or no’question, and there is lots of work to be done on that aspect, helping people to sit down and do the calculations.

The scheme is targeted to abate more than four million tonnes of carbon dioxde emissions every year and comes into affect in April 2011.

 

What happens if you do not join CRC?

The scheme is mandatory and places legal obligations on organisations to disclose information and for larger organisations to report on emissions and purchase allowances from the government.  Any organisation that does not comply will be subject to financial penalties. This penalty will be a fixed sum of £5000 plus £500 per day up to a maximum of 80 days.

 

How can Ecocooling help?

EcoCooling can reduce energy cost by 90% compared with traditional air conditioning.

Contact us today to see what we can do for your organisation.

What are carbon allowances and how do you get them?

Carbon allowances must be bought from the government

If an organisation makes energy savings it will have to buy less allowances from the Government thus saving money on both allowances and energy.

If a company has bought too much allowance – it can either bank it for later use or sell it on the secondary market. Any organisation that does not have enough allowance can buy it on the secondary market.

All revenue raised by the government will be recycled to participants of the scheme. A portion of this will be allocated to organisations according to their performance in the league table.

 

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