As a result of stakeholder consultation, DECC has announced changes to the Carbon Reduction Commitment, which comes into force in April 2010. The main changes are:
- To smooth the introduction of the scheme and to help ease the upfront costs, organisations will only have to report emissions in the first year (2010/11). In subsequent years organisations will have to buy allowances corresponding to their emissions from energy use, and then surrender them by the end of the year.
- In the second year (2011/12) the weighting for early action metrics will be increased from 20% to 40%.
- Recognition will be given to organisations which use onsite renewable energy like wind turbines or solar panels by publishing the increased carbon savings from such measures.
- Organisations will be given greater flexibility in how they participate. Subsidiaries that are large enough to qualify in own right (at least 6000MWh) may opt to do so separately from their organisational group
- Given the primary focus of the scheme is energy efficiency, the CRC will now be known as CRC Energy Efficiency Scheme.
The Carbon Reduction Commitment will be mandatory for organisations which consume 6,000 MWH of energy in 2008 and have at least one half hourly meter. It includes both private and public sector organisations. CCA members will be exempt if their CCA use is 25% or more.
It's basically a cap and trade scheme – carbon allowances will be auctioned and then traded, with the revenue raised returned to the participants as incentives for the best performers.
There will be a 3 year introductory phase from 2010 to 2012 – during this phase the price of CO2 will be fixed - the current figure is £12 per tonne although this is subject to confirmation prior to launch. Initially there will be no limits on the allowances available for purchase. In 2013 full auctioning starts, via sealed bids. The Environment Agency will oversee the programme, although reporting will be self certified with 20% of the members audited per annum.
The actions required of participants are:
1. Forecast emissions in line with abatement strategy
2. Buy allowances
3. Monitor and manage emissions
4. Buy or sell allowances as required.
5. Report at year end – 3 months to report, a further month to surrender allowances.
6. Receive/make a recycling payment.
If you believe that your organisation may be within the criteria you can email CRC@defra.gsi.gov.uk to get on the stakeholder mailing list. The Carbon Trust can offer advice and assistance on the Carbon Reduction Commitment and carbon abatement issues in general.
