Carbon Reduction Commitment (CRC) Energy Efficiency Scheme
Note: The Government is currently considering options for simplifying the CRC Scheme, including: reducing the number of fuels covered; moving to fixed price allowance sales; simplifying the organisational rules; making the qualification process easier; and reducing the overlap with other schemes, specifically CCA and EU ETS. See DECC’s website for the latest information.
Launched on 1st April 2010, the Carbon Reduction Commitment is a mandatory scheme aimed at large energy users. The scheme uses a combination of financial and reputational incentives to encourage participating organisations to reduce their energy usage and related carbon dioxide (CO2) emissions. The organisations targeted by the CRC generate over 10% of the UK’s total CO2 emissions (around 55 MtCO2). The scheme aims to reduce this by at least 4 million tonnes of CO2 per year by 2020(1).
Organisations qualify as full CRC participants if, during the 2008 calendar year, they had a least one half-hourly electricity meter settled on the half-hourly market, and they consumed at least 6,000 megawatt-hours (MWh) through all their half-hourly meters. There are currently around 2,700 private and public sector organisations registered as full participants.
CRC participants are required to measure and report their CO2 emissions on an annual basis, adhering to a specific set of measurement rules. Based on this, and starting in 2012, they must purchase sufficient CRC allowances to cover their emissions for the previous CRC year (1st April – 31st March). Organisations that reduce their energy usage and CO2 emissions year-on-year will, therefore, benefit from lower CRC costs, as well as lower fuel costs. The CRC allowance price for 2012 was set at £12 per tonne of carbon dioxide in the 2011 Budget.
In addition to this financial driver, the CRC Scheme administrator, the Environment Agency, publishes an annual league table that ranks the relative energy efficiency/CO2 reduction performance of all CRC participants. This is designed to act as a reputational incentive to drive further emissions reductions. The first Performance League Table was published on 8th November 2011.
(1) Carbon Trust. 2011.
- For the latest information on CRC Energy Efficiency Scheme legislation please visit DECC’s website
- For the latest information CRC Energy Efficiency Scheme registration, administration and the Performance League Table please visit the Environment Agency’s website
CRC Energy Efficiency Scheme: Annual Statement Request
To help CRC participants compile their annual reports, energy suppliers are obliged to, if requested by a CRC participant or their nominated agent, provide an annual statement detailing the amount of gas and/or electricity supplied to the CRC Participant in the previous CRC year. Annual Statements of Supply will normally be provided within six weeks of the end of the CRC Year (31st March).