Article date:1 October 2010
Written by:Jean-Yves Cherruault
Yesterday marked the deadline for the Carbon Reduction Commitment Energy Efficiency scheme (CRC). According to the Environmental Agency, the scheme regulator, several hundred organisations are yet to register. These organisations have now missed the deadline and face up to an initial fine of £5,000 and an additional fine of £500 for each day they fail to register, up to a maximum of £45,000.
However, recent comments from the Government suggest that organisations which missed the deadline for registration, but contacted the regulator for advice on the registration process, may be allowed more time to complete the registration process.
CRC participants will be required to report their annual total energy related CO2 emissions. They will also need to purchase sufficient CO2 allowances in advance to cover each year's qualifying emissions. Spend will be recycled back in October each year with a bonus or penalty based on the participant's position within a publically available performance league table, which will be published for the first time in October 2011.
Once registration has been completed, the next CRC milestone is in April 2011 when participants will purchase their carbon allowances at £12/t CO2. This needs to be based on an accurate forecast to avoid being short of allowances at the end of the CRC year, which would require purchase from the secondary market. Participants will also need to submit their first CRC footprint report by the end of July 2011. This footprint is crucial as it will serve as a baseline in the recycling payment formula year on year.
Jean-Yves Cherruault, environmental accounting manager at Sustain, said: "For those participants who have yet to register or just registered, there is still some time to implement the necessary processes and procedures to comply with the scheme requirements as well as develop and implement a strategy to perform well.
"Organisations having done so already have already benefited from the rewards linked with best practice energy management."
Government has been criticised on the CRC and advised to re-design a "complex" scheme. As a result, the scheme rules may change slightly and Government has suggested that the introduction of an allowances cap and auction planned for Phase 2 (starting in April 2013) may be removed. This would be replaced by a fixed price for allowances.
Jean Yves adds: "Whatever happens, organisations implementing best practice energy management and carbon reduction measures will feature well within the CRC while benefitting from associated reduced energy costs, and financial and reputational gain."
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