defining the crc catchment
would have greater credence if the UK which typically affect producers of en-
were a significant contributor to the prob- ergy and major industrial users.
lem and could directly influence the What are left in the frame are typically
outcome. the supermarkets, major retail groups
Although Britain has a highly devel- and other commercial organisations.
oped economy, its emissions only rep- There are essentially two criteria for
resent 2% of the world’s total. That is a participation. The first is that an organi-
figure which the Department for Energy
and Climate Change confirms.
The UK’s CRC Energy Efficiency
sation would be purchasing its electric-
ity through at least one ‘settled half hour
Any steps which the present govern-
Scheme will use an auction
meter’ – a process defining the mecha-
ment has taken to ‘combat climate
change’ have to be seen in the context
trading platform to re-allocate
nism by which large consumers are me-
tered and charged by their suppliers.
of their financial cost, the administra-
tive burden on those affected, and the
emissions credits. At its launch in
net impact on the problem, if indeed it
2010, the scheme will target
6,000 MWh per year entry level
can be determined.
organisations of every description
There is currently an entry level of 6,000
MWh per year of electricity consumed
Evolving the CRC which consume more than 6,000
in 2008 (the reference points for admis-
sion). A lower threshold of 3,000 MWh
The prime example of a climate change
MWh of electricity each year. It
had been proposed during the original
initiative which offers more style than
substance is the Carbon Reduction
encompasses organisations like
consultation exercise to help ensure that
the organisations covered would benefit
Commitment (CRC), a concept mooted
back in 2006 and announced as govern-
banks, supermarket chains and
from the scheme through reduced en-
ergy bills.
ment policy the following year. It was
Government departments.
At present prices, and with the entry
one of two primary measures considered level now set at 6,000 MWh, it would
in detail at the time. scheme’s administrators at a fixed price mean that any organisation which spent
The other was a system of voluntary of £12 per tonne of CO less than about £750,000 would be out-
benchmarking and reporting of energy
2
.
Beyond that phase, the users will pur- side the catchment.
use. Stakeholders were reported to have chase most of their allowances in an By setting an absolute consumption
favoured the mandatory policy ap- annual auction, where the total number threshold for participation in the CRC,
proach, and the decision to implement of allowances available at any time will the government trawl has limited the
the CRC was announced in the Energy be determined by the government and number of organisations brought into the
White Paper of May 2007. progressively reduced. The remainder of scheme, but it has also limited those
The mechanism for the CRC is de- their requirement can be obtained by participants’ scope for ‘negotiation’ out
scribed in some detail on page 12. Pared trading with other participants. of the scheme: the 6,000 MWh criterion
down to its bare bones, it is an emis- Which are the organisations that will is relatively easy to check.
sions trading scheme which the govern- be included in the scheme? The inten- It would still be worth participants tak-
ment intends to introduce in April 2010. tion is that the CRC should not duplicate ing legal advice about re-structuring
After an initial registration period, or supersede any of the other energy re- their organisation so that there are no
there will be a phase when qualifying duction strategies already in place. related entities with a total consump-
users will purchase carbon ‘allowances’ Those include the European Carbon tion exceeding 6,000 MWh.
(equivalent to the carbon tonnage of Trading Scheme, the Climate Change DECC accepts that there will be in the
their energy consumption) from the Levy and Climate Change Agreements order of 5,000 organisations for which
The Informed Executive
11
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