FAQs

Q. What is the CRC Energy Efficiency Scheme?
A. The CRC Energy Efficiency Scheme is a compulsory trading scheme aimed at non-energy intensive organisations in the UK. The scheme plans to encourage more efficient use of energy across the public and private sectors.

The CRC Energy Efficiency Scheme will be a mandatory scheme for all organisations that qualify; organisation will have to measure and report their energy use, with an importance on working to reduce carbon emissions and improve energy efficiency.

The scheme requires participants to record and maintain evidence of their emissions, report their emissions for publication in a league table, and purchase (and surrender) sufficient allowances to cover each tonne of CO2 emissions covered under the scheme.

The results of each participant's performance under CRC will be published in a league table annually. The scheme has been developed by the Department of Energy and Climate Change and will be administered by the Environment Agency (or equivalent in Scotland and NI).

Q. How do I know if my business falls under The CRC Energy Efficiency Scheme?
A. In order to decide if your business falls under The CRC Energy Efficiency Scheme there are two qualifying factors:

Do you have a mandatory Half Hourly (HH) Meter that is settled on the HH Market?
Is the total HHM electricity consumed by all UK based sites within the business above 6,000MWh per annum?

Q. Are there any exemptions?
A. There are a number of circumstances that could lead to you being exempt under The CRC Energy Efficiency Scheme. These include:

Emissions currently regulated under the EU Emissions Trading Scheme are exempt.
If 25% of emissions are covered for by Climate Change Agreements (CCA).
Subsidiaries with more than 25% of their emissions covered by CCA's will be exempt from CRC which could lead to the entire organisation being exempt in some cases.

These exemptions must be declared by the 31st July 2010 to be valid.

Q. Who will be administering The CRC Energy Efficiency Scheme?
A. The CRC Energy Efficiency Scheme has been developed by the UK Government, Devolved Administrators and the regulating bodies are the Environment Agency, SEPA (Scotland), NIEA (Northern Ireland).

You will be required to provide a carbon footprint calculation and within this calculation you will need to include:

Any fossil fuels burnt on site i.e. oil or gas fired heating, back-up generators, calor gas and grid electricity.

The government will provide an Emission Factor (specific to the carbon reduction commitment) for each energy source which will convert the usage into tonnage of CO2 per MWh for each source.

Q. How will The CRC Energy Efficiency Scheme be administered?
A. The CRC began in April 2010 and is divided into set time periods known as Phases.

Phase 1: Introductory Phase: 3 years

The following phases will last for 7 years – with the first 2 years of these phases overlapping with the latter as they are preparatory.

Phases consist of:

Qualification Period (Calendar Year 2008) – time to assess whether an organisation thinks they are obligated to be a full participant or just provide an information disclosure to the administrators.
Registration Period (April-September 2010) – organisations must either submit their information disclosure or register as a full participant in CRC.
Footprint Year (April 2010-March 2011) – participants must monitor their total emissions from energy use and determine what emissions need to be included in the CRC, this is then reported to the administrators. You only need to monitor and report 100% of your emissions in the footprint year of each phase.
Compliance Year (April 2010-March 2011) – series of compliance years that run from April-March. During a compliance year an organisation must purchase allowances for each tonne of CO2 they emit, this is based on determined energy use.

Participating organisations must report their actual emissions in the July after the compliance year; they are then required to surrender allowances to cover their carbon emissions. In October they will receive a recycling revenue payment based on their position in the performance league table.

Q. What is the Performance League Table and how will this work?
A. End of each compliance year the administrators will create a performance league table based on the success of organisations to reduce their admissions. This table will be published as a public document and used to decide what recycling revenue organisations will get back.

Performance will be based on the following metrics:

1. Absolute Metric
2. Early Action Metric
3. Growth Metric

The Early Action Metric will be the only metric taken into consideration in the first compliance year. In order to make sure you have achieved the early action metric you will need to have done the following:

1. Attained the Carbon Trust Standard.
2. Extent of voluntary AMR at end of first year.

Organisations will have until March 2011 to put these Early Action Metrics in place.

Q. What are the implications for my organisation of CRC ?
A. If you think you will be obligated under the CRC Energy Efficiency Scheme you are going to need to take certain steps to prepare your organisation for the scheme introduction:

Assessing the extent of your organisation, how many subsidiaries, who will be the parent organisation etc.
Have a firm understanding of the requirement to collect, collaborate and store information regarding energy use in an Evidence Pack.
Ensure that all relevant people are aware of their role within the CRC scheme, and that any relevant Government Departments are dealt with correctly.
Estimation of your expected requirement for CRC allowances and ensuring that you are financially prepared.
Investigating and guaranteeing you can improve your performance under the CRC Scheme.

Q. What do I have to do given my organisation qualifies as a full participant?
A. Gather information to enable you to meet the evidence pack and reporting requirements of the scheme and make sure you meet the registration completion deadline of the end of September 2010 (taking into account it will take approximately 6 weeks for registration to be completed). Organisations need to submit data as a group if part of a group unless any Significant Group Undertakings (SGUs) are present which meet the eligibility criteria in their own right and can register in their own right.

The highest parent organisation (actual or appointed for the purpose of CRC) will need to provide energy consumption data on behalf of the whole group. This energy consumption data only needs to show the electricity consumed through meters settled on the half hourly market in 2008.

If your organisation fails to register for CRC by the registration deadline then fines are applicable and start from a £5,000 fixed fine to £500 for each subsequent working day that your organisation fails to register, up to a maximum of 80 working days. This equates to a total possible fine for failure to register of £45,000.

Q. What do I have to do as my organisation is required to make an information disclosure?
A. If your organisation consumed electricity through meters settled on the half hourly market in 2008, but this consumption was under the 6,000MWh threshold, you are required to make an information disclosure to the Environment Agency during the registration period (deadline 30th Sep 2010). The information required will be your actual half hourly metered electricity consumption in 2008 to show that this is under 6,000MWh.

You will also be required to reassess your position based on consumption in the qualification period of each of the following phases to see whether your consumption has increased above the 6,000MWh threshold.

If your organisation fails to register for CRC by the registration deadline then fines are applicable and start from a £5,000 fixed fine to £500 for each subsequent working day that your organisation fails to register, up to a maximum of 80 working days. This equates to a total possible fine for failure to register of £45,000.

Q. What information do I need to keep in the evidence pack?
A. An evidence pack must be available for auditing purposes by the Environment Agency at any time. Information on your organisation's energy consumption for Phase 1 must be kept pretty much for ever more and the other information required in the evidence pack must be kept for 5 years beyond the end of the phase to which it relates.

There are five categories which define the evidence pack requirements on participants.

Structural Records - containing information relating to the organisational structure at the time of qualification (31st December 2008) and any changes that have occurred since this date, or which occur during participation in the scheme.
Data records - contain information on the energy consumption of the organisation or group, such as copies of monthly invoices or statements from suppliers.
Special event records - which cover any unusual events, such as meter breakdowns or change of energy supplier.
Early action data – Early action and growth metric data which provides evidence to support your organisation's score in the early action and growth metrics. This could include copies of certificates which prove a site has attained the Carbon Trust Standard or evidence of turnover to enable calculation of emissions per unit turnover.
Exemptions records – any evidence of any energy consumed by your organisation which is exempt for the purposes of CRC, or any electricity generated on site for which an Electricity Generating Credit has been obtained.

Q. Do we still have to participate in CRC if my organisation is covered by a CCA?
A. CRC has been designed to avoid overlapping with CCA policy so generally, any emissions across your organisation which are covered by a CCA are exempt from CRC. On some occasions, the entire organisation may be exempt from CRC.

If your organisation is a single entity which has a CCA covering more than 25% of its relevant emissions you will be fully exempt from CRC.

If at any point the CCA ceases to cover your organisation or the member organisation of a group, those emissions must then be covered by CRC and you will cease to be exempt from the scheme.

Q. Do I have to include all of the buildings I own as a landlord?
A. If you as a landlord are the signatory on the energy supply to any of your buildings, you are responsible for the emissions relating to that supply.

Q. Do I have to include the buildings I lease as a tenant?
A. If you are a tenant and are the signatory on the energy supply to your building(s) you are responsible for the emissions relating to that supply.

Q. What urgent actions need to be taken?
A. In order to be best prepared for The CRC Energy Efficiency Scheme there are some key steps that need to be taken into immediate effect:

1. Identify all sites with a HHM.
2. Monitor energy usage through HHM's to find out if the energy usage is around 6,000MWh or above.
3. Gather all energy bills and statements from 2008 and keep these together in preparation.
4. Create a list of fixed source energy use and emissions.
5. List emissions already covered by EU ETS or CCAs.
6. Look into any emissions where a tenant/landlord is involved to find where the obligation lies.
7. Begin the development of CRC strategy and carbon trading strategy.

If you are interested in finding out more on how we can help manage your CRC Obligation simply call us on 0844 873 1034.