Member Article

The property industry will have an opportunity to assess the impact of the Carbon Reduction Commitment (CRC) when a user guide and a consultation paper are issued by the Government, this month.

The CRC is a UK-wide, legally binding scheme designed to reduce energy use, and a key component of the Government's strategy to reduce carbon emissions attributable to property.

On an annual basis, organisations within the scheme will buy carbon allowances equivalent to the amount of energy they use, and also monitor and report their energy use emissions. The revenue raised through the purchase of allowances will be recycled back to organisations within the scheme.

An annual performance league table will be published in the interests of transparency, and used to determine bonuses or penalties that will be applied to each organisation's recycling payment from the scheme.

A three year introductory phase of the scheme is due to start in April 2010. However, businesses will need to assess if they are affected by the scheme this year. Registration packs are due to be sent out in July, and the Government proposes that organisations in the scheme will be required to monitor and report their total energy use emissions from October.

An organisation will be included in the scheme if it has at least one electricity meter settled on the half-hourly market and its total half hourly metered electricity use was 6,000MWh in 2008.

It is intended that both the private and public sector will be involved. The Government's latest indication is that if an organisation (including any parent company and its subsidiaries) spends more than £1m-a-year in the UK on electricity, it is likely to be included in the scheme.

To avoid any administrative overlap, the scheme will not include emissions covered by climate change agreements or emissions trading schemes. These tend to apply to energy intensive organisations, such as electricity production companies.

It is the parent company of a group of companies that will be affected by the scheme, but the electricity use of subsidiaries will be taken into account in assessing whether the parent company is included in the scheme. Parent companies will also be responsible for reporting on total energy use emissions of subsidiaries, once the scheme is established.

The user guide will provide further information on what businesses and other organisations should do to assess whether they will be affected by the scheme.

 

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