CRC's in Britain
The Arrival of CRCs in Britain will effect 20,000 UK Companies. What does this mean for them?
On April 1 2010, new, tough regulations come into force in the United Kingdom under the Climate Change Act aimed at forcing business to be more energy efficient. It is called the CRC Energy Efficiency Scheme and was previously known as the Carbon Reduction Commitment.
We believe that our Zeropex Difgen System can play a vitally important role in helping British Business meet its CRC obligations through smart carbon reduction.
Here is a useful synopsis by the IP team at Maclay Murray & Spens, a leading Scottish Legal practice who have looked behind the rules that have just come into force.
What is the CRC?
The CRC is a new mandatory emissions trading scheme which is designed to encourage improvements in energy efficiency and heighten awareness of climate change issues in large organisations across the UK. The CRC forms a fundamental part of the UK's strategy to reduce carbon dioxide emissions and meet the targets set by the Climate Change Act 2008. Participants in the CRC must purchase carbon allowances equivalent to their emissions each year. If levels of emissions exceed the number of carbon allowances held by an organisation it must purchase extra allowances to make up that deficit. Where emission levels are less than anticipated, allowances can be sold on to other organisations.
Who is affected?
Large public and private sector organisations across the UK will be affected by the CRC. Likely participants include large professional services firms, large retailers, supermarkets, banks, hotel chains, rail operators, utility companies, hospitals, universities, local authorities and central government departments.
Qualification for the CRC is based on half hourly metered electricity usage. An organisation must participate in the CRC if, during 2008, it had:
- at least one half hourly electricity meter settled on the half hourly market across the whole organisation (something an electricity supplier can confirm)
- a total half hourly electricity consumption of at least 6,000 megawatt-hours (MWh). This equates to an annual electricity bill of approximately £500,000.
The charge for registering as a participant for the CRC is £950. Organisations which meet the first criteria but consume less than 6,000 MWh of half hourly electricity will not qualify as a participant. They will, however, still need to disclose certain information at the beginning of the CRC if their consumption is between 3,000 and 6,000 MWh.
Estimates suggest that around 20,000 organisations are likely to be affected by the CRC, with between 4,000 and 5,000 of these required to participate fully.
The CRC applies to emissions across whole organisations. An organisation required to participate in the CRC may already operate an installation or site included in the EU Emissions Trading Scheme or a Climate Change Agreement, but will not be required to submit CRC allowances for emissions regulated by these schemes
What are the penalties for non-compliance?
Failure to comply with or participate in the CRC where required to do so will attract civil penalties. Monetary fines, blocking a participant from being able to trade allowances, and naming and shaming are all listed in the Order as penalties for non-compliance. The Order lists a range of financial penalties for the various areas of non-compliance. For example, failing to register attracts a financial penalty of £5,000 plus a further £500 for every day of continued non-compliance (subject to a maximum of 80 days), as well as naming and shaming on the Administrator's website.
The Order also provides for substantial criminal penalties (including unlimited fines and a maximum of 2 years' imprisonment) for knowingly making false or misleading statements on material matters relating to the CRC, or failing to comply with "Enforcement Notices" issued by Administrators. Enforcement Notices can be issued to any person who fails to comply with the provisions of the Order, and can set out steps which must be taken to remedy the failure.
You can find more detail on CRC's when you follow these links:
http://emailinfo.mms.co.uk/go.asp?/.emails.property/bMMS001
http://www.director.co.uk/magazine/2010/2_Feb/energy_63_06.htm
http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/crc/crc.aspx
