Carbon News

Monday 01 March 2010

Large public and private organisations will be forced to cut emissions from next month

A month before it begins, the CRC Energy Efficiency Scheme has been described as "real opportunity" for businesses to lead on fighting climate change.

From April 1, the mandatory scheme, formerly known as the Carbon Reduction Commitment, will require around 5,000 public and private sector organisations to record and monitor their CO2 emissions before purchasing allowances equivalent to their emissions each year in a 'cap and trade' mechanism. A further 20,000 other organisations will be required to participate in some other way.

If organisations choose not to buy allowances they must invest in ways to decrease the number of allowances they need to buy, such as renewables and energy efficiency measures.

The lack of focus on incorporating renewable energy has seen the scheme criticised by industry as it prevents organisations from putting renewable energy generated onsite towards their carbon emissions targets under the CRC (see this NewEnergyFocus.com story).

In its response to the CRC consultation in October, the Department of Energy and Climate Change (DECC) conceded to publishing the increased carbon savings from measures such as wind turbines or solar panels, but emphasised that the CRC is primarily an energy efficiency scheme.

DECC said that the CRC, which is to be run by the Environment Agency, would save participants around £1billion per year by 2020 and help move the UK towards its 2020 target of reducing emissions by at least 34% on 1990 levels through cost effective energy efficiency measures that are not yet being taken up.

The Department expects the scheme to have delivered emissions savings of at least 4.4 Mt CO2 per year by 2020.

Energy and Climate Change Minister Joan Ruddock said that the CRC would see large public and private sector organisations cutting emissions as well as saving money on fuel bills.

"This is a real opportunity for business and industry to take a leadership role in tackling climate change and gain reputational advantage as a result," she said.

CRC

The scheme will target organisations whose annual half hourly metered (HHM) electricity use is at least 6,000 Megawatt hours (MWh) - typically those that spend £500,000 a year on electricity - although all organisations that have a half hourly meter will be required to participate in some way.

The 5,000 organisations participating fully must not only record and monitor their CO2 emissions, but also purchase allowances equivalent to their emissions each year.

The overall emissions reduction target is achieved by placing a ‘cap' on the total allowances available to each group of CRC participants.

Within that overall limit, individual organisations can determine the most cost-effective way to reduce their emissions, either through buying extra allowances or developing ways to reduce the number of allowances needed.

Much like the Renewables Obligation, all the money raised through the allowances will be recycled back to participants, according to how well they perform. As well as a table of renewables usage, the scheme features an annual performance league table that ranks participants on energy efficiency performance.