CRC Energy Efficiency Scheme — the Final Draft?

Posted under environment by Daniel Stouffer

The British government has taken significant steps to get feedback surrounding the proposed CRC Energy Efficiency Scheme, as the project gets ready to officially start in April of 2010. Legislation has been under discussion for quite some time, yet during recent surveys a number of affected organizations still appear to be uncertain about what to do.

It is estimated that there are approximately 5000 companies in Britain deemed to be major energy users and emitters of carbon dioxide. These companies were selected according to their electricity usage, more than 6000 MWh of electricity per year and they already spend about 0.5m on energy bills. Qualification was judged during calendar year 2008 and during 2009, those affected were strongly advised to begin preparations.

During the launch of the CRC Energy Efficiency Scheme in April of 2010, three key phases will commence. However, when the scheme really gets underway in 2013 it will develop into a capped, auction-based market operation and carbon emission allowances must be successfully traded amongst all competitors.

When the CRC Energy Efficiency Scheme was first proposed, it was known as the Carbon Reduction Commitment and this name has now been officially changed during final consultations. Originally, the government had proposed that organizations purchase their annual carbon emission quota each year, with the first purchase due in April 2011 relating both to 2010 and 2011 emissions. This effectively doubled the cash commitment at that point in time, but this suggestion has now been abandoned.

The CRC Energy Efficiency Scheme is not intended to be a revenue raiser for the government and as such, no money will flow to the taxpayer. Indeed, in an ideal world an organization will receive rebates for the emission allowances it purchased, but the government intends to promote the scheme by running a league table. This league table will show relative performances and those companies that do well will receive a bonus on top of a rebate, while those that do not will be penalized.

An early survey showed that as many as 60% of businesses affected by the CRC Energy efficiency Scheme were still unaware of its full implications. Some thought that they could leave any actions to reduce carbon emissions until the scheme got underway properly in 2011. However, the government has installed “early action” metrics and those who register with the Carbon Trust Standard or go out of their way to install automatic meters in advance, will figure more highly on the league table and attract bonuses.

Organizations that are ill-prepared or who fail to take clear action face considerable financial implications as compared to those who are optimally efficient. Energy savings can only represent additional financial savings to the balance sheet anyway.

The CRC Energy Efficiency Scheme seems ready to be rolled out by the British government in April 2010. This will be the time to register participation and the period then commencing will also be known as the “footprint year,” during which time energy used will form the basis for determining the company’s subsequent position.

Daniel Stouffer has much more data about the CRC Energy Efficiency Scheme and how a visit to www.verisae.com can benefit you.