CRC Energy Efficiency Scheme Questions
What is the CRC (Carbon Reduction Commitment) Energy Efficiency Scheme?
The CRC Energy Efficiency Scheme is mandatory emissions trading initiative, recently introduced within the UK to reduce the levels of carbon dioxide emissions within the environment. Participating organisations are required to monitor and reduce their energy usage and purchase allowances for each tonne of CO₂ they emit. The greater the levels of CO₂ emitted, the more allowances that organisation will purchase, therefore acting as a deterrent to excessive energy consumption. At the end of each compliance year (31st March), all participants must surrender allowances equivalent to their emissions released. The government will then produce and publish a comparative ‘performance league table’ which will allow identification of the best and worst performers respectively. Heavy financial penalties will be imposed on organisations that are required to participate but fail to do so.
Which organisations are affected by CRC?
Participation within the CRC scheme is based on the quantities of energy supplied to an entire organisation, not individual units. Those that, throughout 2008, had a minimum of one settled half hourly electricity meter and consumed 6000 megawatt hours (MWh) or more are required to register as a CRC participant. Organisations that during 2008, had at least one settle half hourly meter but did not consume 6000 megawatt hours (MWh) of electricity are required to make an information disclosure. Here, there is no requirement to report on emissions generated, or to worry about purchasing allowances.
Which organisations are not included in the CRC scheme?
Organisations are not required at present to participate within the scheme if: They are billed for electricity and gas usage quarterly or annually. More than 25% of their emissions are covered by Climate Change Agreement (CCA) Emissions are regulated under the European Union Emission Trading Scheme (EUETS)
How is the CRC scheme administered?
The Environment Agency is the administrator for registering and running the initiative and selling allowances on behalf of the government. Energy auditing and taking action for non-compliance is the responsibility of the regulators – in England and Wales the Environment Agency, the Scottish Environment Protection Agency and the Northern Ireland Environmental Agency.
How much does it cost to register for the CRC Energy Efficiency Scheme?
The government has imposed a £950 charge for full participation within the scheme.
Do gas meters need to be reflected within our CRC disclosure?
Generally, yes. All gas measured through daily read meters, through remote AMR meters and through non-daily read meters where the consumption exceeds 73,200 KWh per year must be included.
Can I appoint Torse as my registered CRC Energy Efficiency Scheme Agent?
Yes, Torse are an officially certified CRC agent. We are able to pro-actively and professionally deal with any organisations CRC requirements on their behalf. Working with our experienced consultants, we ensure our services are fully tailored to meet your specific needs and objectives. Torse will ensure that not only do you meet your CRC requirements, but you strongly benefit from the opportunities provided by the CRC league table. For more information regarding Torse and your CRC requirements please send us your details using the contact form.
What is the ‘Carbon Trust Standard’?
The Carbon Trust Standard (CTS) is an award given to organisations that effectively measure, manage and reduce their carbon emissions. The CTS award allows organisations to benefit from a higher league table position during the first three years of the CRC Energy Efficiency Scheme.
What are ‘safety valve’ allowances?
Safety valve allowances are where the administrator will purchase allowances from the EU Emissions Trading Scheme Registry on behalf of participants; these can then be converted into CRC allowances. Safety valves are sold at the ETS market price, with additional broker and handling fees included.
If our overall electricity consumption drops below the threshold, does the organisation have to remain in the CRC scheme?
Yes. These changes will be reflected within the Growth Metric.
Carbon Footprint Calculation – What is it and what needs to be included?
For each energy source consumed, the government will provide an emission factor (EF) to convert energy usage to tonnes of CO₂ per MWh for that particular source of energy. This allows you to understand what each individual component is releasing, as well as the total emissions. In calculating an organisations carbon footprint, it is important to include both fixed point direct and indirect energy emissions. Therefore any form of fossil fuels consumed on site, including oil/gas heating and back-up generators, as well as grid electricity, must be included.
How do you define performance within the league table?
The league table will rank participants within 3 key metrics, these are: Absolute Metric, Growth Metric, Early Action Metric.
What is the ‘Absolute Metric’?
The absolute metric compares the participants’ current annual emissions to the average emissions over the past five years. For the first five years of the CRC scheme, emissions will be compared against the averages of available data.
What is the ‘Growth Metric’?
The growth metric is a measurement of how energy intensive your organisation is. It is determined by the emissions released in relation to the turnover or revenue expenditure of the organisation.
What is the ‘Early Action Metric’ and how is it calculated?
The Early Action Metric rewards organisational efforts in increasing their energy efficiency before the start of the CRC scheme, essentially providing a representation of an organisations good energy management. It is based on two key elements, both of which are equally weighted: Firstly, is the percentage of an organisations emissions from electricity and gas, that is covered by voluntary installed automatic meter reading (AMR) (link to Torse smart metering faq’s or general content) by the end of March 2011 The percentage of a participants reported CRC Energy Efficiency scheme emissions covered by the Carbon Trust Standard (CTS) or similar by the end of each year of the introductory phase.
What are the penalties for inaccurate reporting?
When submitting information to the Environment Agency, participants are allowed a five percent margin of error. Any further inaccuracies will be fined at £40 per tonne of carbon dioxide.
Is there funding available in order to increase our organisations energy efficiency?
Yes, many government bodies will provide energy efficiency funding in the form of interest free loans or grants. Competition can be very strong for these, and gaining the funding can often be a long and laborious task. Please contact Torse to understand what funding is available to your organisation.
What happens with the revenue generated through purchased ‘allowances’?
From the outset of the CRC Energy Efficiency Scheme all revenue generated was due to be ‘recycled’ back to participants based on their performance within the league tables. However in the 2010 Comprehensive Spending Review, George Osborne outlined plans to now withhold this revenue for investments in ‘green energy’. Click here to see the Torse News Article.
What effects will the resource cuts of the Environment Agency have on the CRC Energy Efficiency Scheme?
At present we are yet to see exactly what impact it will have on the operations of the scheme. As and when information is available you can be sure Torse News will provide you with all the details you need. Click here to see the Torse News Article.
At present our organisation does not have to participate within the CRC Energy Efficiency Scheme… What happens if we acquire a site mid-phase which increases the energy consumption above the threshold?
If you purchase a site, which alone is required and currently participates within the CRC Energy Efficiency Scheme, your corporate organisation does not need to join mid-phase. This is known as ‘designated change’.
What is ‘designated change’?
Designated change is a large change within an organisation including the sale of a CRC participant or Significant Group Undertaking (SGU). All responsibility for CRC participation therefore transfers to the new organisation, which must deem this change to have taken place at the beginning of the compliance year.
Are UK multi-nationals responsible for their emissions for sites situated outside the UK?
No. The CRC scheme is only enforced for activities based within Great Britain and Northern Ireland.
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