Carbon Reduction Commitment
April 2010 saw the Government introduce a new legally binding climate change and energy saving scheme that targets businesses to reduce UK carbon emissions.
What is CRC?
The CRC Energy Efficiency Scheme is a mandatory carbon trading scheme for any business with half hourly billed sites using more than 6,000 MWh in 2008 (about a £500,000 electricity bill). The scheme is a cap and trade mechanism where participants trade allowances annually to the value of their carbon emissions.
At the end of each year, league tables will be produced showing the performance of all participating companies. Revenues from the scheme will be recycled to participants but depending on their position in the league table, a penalty or bonus will result.
Fines
Any business within the CRC criteria that misses the registration deadline of 30 September, faces an initial £5,000 fine and a daily charge of £500 until registered, up to a maximum of £45,000. Penalties may also be charged for incorrect or inadequate reporting at a rate of £40 per tonne of CO2.
What are the cost implications under CRC?
Analysis by PriceWaterhouseCoopers found poor performing businesses with energy bills of £1m, could pay costs of up to £500,000 over five years. However, business with the same sized bill could reduce its energy costs by 8% equating to £85,000 in savings in just one year, and £150,000 over five years. Therefore good performance could result in bonuses and an enhanced company reputation.
How to register
If your business is in scope you need to register for the scheme by 30 September via the online registry (click here).
Useful links
UES is working with Business In The Community and the South Wales Chamber of Commerce to help their members manage the significant implications of the CRC legislation.
To avoid negative publicity, fines and penalties from this scheme, we recommend you act as soon as possible.
If you would like help with any aspect of the CRC scheme then please contact us.
