CARBON REDUCTION
Carbon Reduction Commitment
MAKING
CHANGES
With the enactment of the CRC last month, the most significant piece of energy efficiency legislation has seen thousands of businesses across the UK registering their electricity usage. Tom Idle reports
T
he first organisations have successfully registered with the Environment Agency in preparation for the biggest piece of energy-efficiency regulation devised by the UK government. On 1 April, the Energy Efficency Carbon Reduction Commitment, or CRC, came into force, in a bid to get the country’s second largest group of energy users to cut their consumption. No longer will companies that spend more than half a million pounds on their annual electrici- ty bill be able to unconsciously access the UK’s energy supplies without repercussions. Now, they will have to tell the Environment Agency
how many tonnes of CO2 they have used, and thanks to a league table system, their efficiency performance will be ranked along with their competitors. With the trade element of the scheme starting next year and the cap starting in 2013, companies will benefit from continu- ously cutting the energy being used, otherwise they will have to pay for extra allowances to supplement their inefficiency – and their share- holders will not be happy if the firm comes out at the bottom of the league.
Around 20,000 organisations will have to register with the Environment Agency if they had at least one half-hourly meter in 2008 – and they have until September to do so, regardless of whether they are eligible to take
part in the scheme. Only 5,000 of these firms are likely to take part. Malcolm Fergusson, the Agency’s head of climate change is conscious that the new legislation will affect businesses that aren’t used to being regulated. “We have a fairly good idea about who should be regis- tered. So if an organisation that appears to be eligible hasn’t registered, in the first instance, we’ll have a polite word with them,” he said. “This is new and we know it’s going to cover a lot of businesses that haven’t been under the aegis of environmental regulation in any form before. Whole new sectors are coming to our attention – they don’t know us, we don’t know them. So, we’ll be leaving the big stick in the cupboard for as long as we possibly can.”
Complex regulation
Of course, the EU emissions trading scheme (EU ETS) deals with the bulk of the UK’s emissions, much of which emanates from huge industrial sites and power plants. But the CRC is designed to regulate the big organisations that tend not to see energy as a facet that demands attention. Electricity use might be large in absolute terms (£500,000 a year), but it might only be a small share of the business. “In many cases, it may not even be monitored in a coherent way, far less managed in its own right,” says Fergusson.
24 April 2010 ❘ Sustainab le Business
The CRC is a fairly complex piece of regu- lation that has had its challenges. Unlike the EU ETS, the CRC isn’t based on heavy-con- suming sites like power stations, it is based on entire businesses of all shapes and sizes. The Agency is used to regulating factories; “you know where the fence is, what is in and what is out,” he adds. “We have a job to do to define organisations – what’s in the CRC for complex organisations.”
One such complex organisation is EDF
Energy. As one of the UK’s biggest energy providers, it is not only busy helping its cus- tomers prepare for the new regulation, it must also get ready to comply in its own right too. For Siobhan Hyland, a regulation analyst with the company, CRC preparation is about iden- tifying the right reporting lines within the business and bringing teams together. “Our organisation is incredibly complex with lots of subsidiaries,” she says. “We have our own cli- mate commitments, so we already have a reporting structure in place. But it’s still quite complicated when you look at the legal struc- ture of large and diverse organisations.” Her advice is for companies not to get too concerned with the trading elements of the scheme at this stage and try not to get over- whelmed with the complexity of it all. “Just break it down simply. Look at your organisa-
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36