This week’s Government Response to the Consultation on the Draft Order to Implement the CRC marks the final stages in the gearing up to the scheme’s initiation.
The ‘CRC Energy Efficiency Scheme’ (CRC) is central to the UK’s energy efficiency and emissions reduction (CO2) strategy, as set out in the Climate Change Act. Administered by the Environment Agency, all UK billing addresses with settled Half Hourly Meters will be engaged in the scheme.
At its heart, the CRC represents a carbon ‘cap and trade’ scheme that requires mandated organisations across the public and private sector to calculate carbon footprints and purchase emissions allowance credits.
During an initial qualification and registration period, organisations must submit an information disclosure or register as a trading participant depending on electricity consumption.
Of an initial ~20,000 organisations, an estimated 5,000 participants will go forward to the full footprinting, reporting, and trading requirements of the CRC compliance years.
In each compliance year, participants complete four steps:
1. Buy allowances based on expected energy use emissions
2. Monitor energy use and report emissions
3. Hold or cancel allowances equal to their emissions
4. Receive a revenue recycling payment based on performance in the scheme
Further details will be available here soon.
April 2011, the second compliance year of the introductory phase, will bring the first sale of allowances at £12/tCO2, with the fully fledged capped scheme active by 2013, during which the pot of available allowances will be reduced in scale.
Wood Holmes are already advising a range of clients in understanding the CRC process, as well as the wider issues related to the transition to a low carbon economy. For further details please contact us at contact@woodholmes.co.uk.
