Carbon Reduction Commitment
The Carbon Reduction Commitment (CRC) is a mandatory emissions trading scheme covering large non-energy intensive industry sectors which will start in 2010. Those companies covered by the CRC will be required to purchase carbon allowances equivalent to the level of carbon they expect to emit from fixed energy points including electricity, gas, gas oil, petroleum and heat. Transport emissions are not included. A carbon price will be initially set for allowances in 2010 and then allowances can be bought and sold by auction from 2013.
The Carbon Reduction Commitment will cover large business and public sector organisations such as Government departments, local authorities, banks, retailers, universities, water companies and hotel chains.
Inclusion in the CRC will be measured on electricity consumption in 2008. If an organisation in Great Britain has at least one meter settled on the half-hourly market or in Northern Ireland, at least one 70 kilo Volt-Ampere, it may be included in the CRC. If an organisation's meters collectively exceed 6,000 MwH during 2008, it will qualify for the scheme. In general, organisations including any parent company and its subsidiaries spending more than £500,000 a year in the UK on electricity is likely to be included in the CRC.
CRC will not cover energy use emissions in Climate Change Agreements (CCA). CCA participants will be completely exempt from CRC providing their CCA energy use exceeds 25 per cent of total organisation energy use. For example, a subsidiary with a CCA would be exempt but the remainder of the organisation without CCAs would still be included in the CRC.
In early 2009, the Environment Agency - who will administer the CRC - will contact all UK billing addresses with half-hourly meters providing them with registration packs. Organisations receiving one of these packs will need to provide information on total half-hourly electricity consumption in 2008 together with a list of half-hourly meters.
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