CRC is a new proposed mandatory cap-and-trade scheme to reduce energy use emissions from large business and public sector organisations. From our calculations, EEF estimates that many members may be caught by this new trading scheme.
The government hopes that the CRC will deliver carbon savings of 1.2 million tonnes of carbon (4.4 million tonnes of CO2) per year by 2020 from large business and public sector organisations. In November 2006, DEFRA previously consulted on policy measures to reduce carbon emissions from this target sector with the EPC. DEFRA has since announced in the recent Energy White Paper its intention to implement the CRC.
The CRC is a UK wide proposal and will target organisations with annual electricity consumption from mandatory half hourly meters in excess of 6,000MWh. At current energy prices, this would generally include organisations with annual electricity bills above £500,000. Once an organisation is caught by the scheme, all its energy use will be measured as part of the targets.
This consultation focuses on the detailed design and implementation issues for the CRC such as:
- definition of an organisation for the purposes of CRC;
- identification of participants;
- landlord tenant issues;
- possible de minimis rules to exempt small sources of emissions;
- specific coverage issues such as schools, street lighting, and rail traction energy use;
- entry to and exit from the CRC and changes of operation;
- the CRC phases and cap setting;
- the design and timing of the auction;
- the recycling of auction revenue and design and operation of the league table;
- the approach to monitoring, reporting, audit and penalties.
The consultation document is split into five sections:
- Section A: looks at the strategic policy context and the role and relationship of CRC with other climate change policies;
- Section B: looks at coverage – definition of an organisation, identification of participants, landlord tenant issues, and treatment of specific emissions;
- Section C: looks at cap setting, including the length of phases and setting the fixed price for the introductory phase;
- Section D: looks at the design of the emissions market including the type of auction, recycling of revenues, the performance league table and powers to amend scheme parameters;
- Section E: looks at monitoring, reporting and audit including composition of the evidence pack, treatment of CHP, proposals for audit, registry design and penalties.
EEF will be responding to this Consultation and would welcome your views on the proposals, in order to feed into the EEF response.
Stakeholder workshops
DEFRA is holding two one-day workshops, in London on 12th July and in Manchester on 19th July, to provide an opportunity for industry stakeholders to discuss and provide feedback to Defra on the proposals for the design and implementation of CRC. More details on the proposals and how to register an interest to attend one of the events are available on the DEFRA website.