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First CRC penalties handed out

6 July 2012

The first CRC civil penalties have been handed out by the Environment Agency totalling £99,000 for non-compliance under the CRC Energy Efficiency Scheme (the CRC).

How is the penalty amount determined?

If a report is submitted on or before 27 September 2011 (within 40 working days of the 29 July 2011 reporting deadline) a fixed payment of £5,000; and an escalating penalty of £500 for each working day the report is late from the 29 July deadline; and publication.
   
The Environment Agency has limited discretion to waive or modify penalties where participants provide evidence to show that:

• the participant took all reasonable steps to comply with the CRC Order or to rectify the failure in compliance as soon as it came to their attention; and
• in all the other circumstances it is reasonable to exercise discretion
  

The CRC penalties were enforced on four participants in the CRC who each failed to provide required reports on time. The highest penalty was £41,000 and the lowest was £10,000.

The CRC Energy Efficiency Scheme Order 2010 enables the Environment Agency who is the administrators of the CRC to allocate penalties for non compliance.

The penalties show that the Environment Agency are taking the CRC seriously and missing deadlines is not an option.  This action also acts as a reminder of the up and coming requirements to submit annual reports by 31 July 2012 for the reporting year 2011/12 and to surrender adequate allowances this year.

Participants will be considered compliant if they order sufficient allowances with payment of cleared funds by 31 July 2012 and subsequently sufficient allowances are surrendered by 28 September 2012.

Allowances must match the tonnage submitted in the annual report which also must be submitted by 31 July 2012.

If participants do not submit the report on time the above penalties will be enforced, however if the participants do not surrender allowances on time there are associated penalties;

For Failure to surrender allowances;

• participants must immediately acquire allowances equal to the allowances that should have been surrendered.
• participants must surrender the shortfall in allowances. 
• participants will be charged £40 per tCO2 penalty per shortfall allowance
  

For more details on CRC Enforcement and penalties click here.

Comply Direct have helped a number of companies get up to speed on their CRC obligation, if you are unsure about what you need to do or if you require assistance in managing your CRC obligation please call 0844 873 1034 or email carbon@complydirect.com.