The CRC Energy Efficiency Scheme (CRC), formerly the Carbon Reduction Commitment, is a mandatory scheme designed to:
- promote energy efficiency
- reduce carbon emissions
- help businesses save money by reducing their energy bills.
The CRC targets emissions that are not already covered by Climate Change Agreements (CCAs) or the EU Emissions Trading System (EU ETS).
Who does the CRC Energy Efficiency Scheme affect?
The CRC mainly affects large private and public sector organisations, such as supermarkets, banks and local authorities. Sole traders and individuals, who are considered to be small emitters, are excluded from the CRC.
You are likely to be covered by the CRC if your organisation’s electricity is metered by at least one half hourly meter (HHM) and you buy on the half hourly market. Your electricity supplier can tell you if you buy electricity on the half hourly market.
You will need to:
- comply fully with the CRC if your half hourly metered electricity supply was 6,000MWh or more between 1 January 2008 and 31 December 2008
- make an information disclosure if your half hourly metered electricity was below 6,000MWh between 1 January 2008 and 31 December 2008.
The Environment Agency has written to all UK organisations they believe have an obligation under the CRC. If you have not received a letter but think you should have you can email CRC help.
You are responsible for checking if the scheme applies to you. Stay informed about the CRC by signing up to the Environment Agency mailing list. Email CRC help.
Can your business claim an exemption from the CRC Energy Efficiency Scheme?
You may be able to claim a full or partial exemption from the CRC if enough of your emissions are covered by a climate change agreement (CCA). To find out more, see the Environment Agency’s guidance on CCA exemptions.
CRC Energy Efficiency Scheme: Guidance on EU Emissions Trading System, (EU ETS) and Climate Change Agreements (CCAs) (Adobe PDF - 804KB)
When doesn't the CRC Energy Efficiency Scheme apply?
Emissions from some activities are excluded from the CRC including from:
- domestic accommodation
- caravan sites
- transport
- supplies you provide to another party (except where you are a landlord who is responsible for paying your tenant’s energy bill).
Who regulates the CRC?
The scheme is enforced by your environmental regulator: the Environment Agency in England and Wales, the Department of the Environment in Northern Ireland and SEPA in Scotland.
The Environment Agency is the administrator for the scheme and will manage the online registry and administer the sale of carbon allowances for the whole of the UK.
How does the CRC work?
The CRC started on 1 April 2010 and is divided into phases. The introductory phase lasts for three years and subsequent phases will each last seven years.
Each phase has a:
- Qualification period during which you must decide whether or not you are required to participate fully in the CRC or only make an information disclosure.
- Registration period during which you must register as a participant or submit an information disclosure.
- Series of compliance years which run from April to March like financial years
- Footprint year where you monitor your total emissions and decide what emissions must be included in the CRC. This is the first compliance year of each phase. You must send the data, called a footprint report, to the Environment Agency.
- Series of annual reporting years during which you calculate your energy supplies that have been included in the CRC. You must report your actual emissions by the end of July after each annual reporting year and surrender allowances to cover your reported emissions. In October, you will receive a revenue recycling payment based on your performance in the previous year.
The Environment Agency will produce a performance league table each year. The better you have performed, the higher you will be listed in the league table. The money raised from the sale of allowances will be recycled back to participants. The size of the repayment will depend on your performance in the scheme.
From April 2013, there will be a sale of allowances each year via an auction. The government will cap the total number of allowances available each year to ensure that overall emissions fall.
What do you have to do in the first compliance year?
The first compliance year runs from April 2010 to March 2011. This is also the footprint year and the first annual reporting year. This is part of the introductory phase and is a reporting only year. You will not need to purchase any allowances until April 2011.
The qualification period is 1 January 2008 - 31 December 2008.
The registration period is 1 April - 30 September 2010.
Environment Agency: CRC Registry
Environment Agency: Changing your contact details in the CRC registry
Environment Agency: Supporting guidance and overarching rules
Environment Agency: CRC Energy Efficiency Scheme - frequently asked questions
If you need to participate in the first compliance year
If your organisation's half hourly metered electricity supply was 6,000MWh or more in 2008 you will need to register as a participant using the online registry between 1 April 2010 and 30 September 2010.
If your business is in the private sector and would qualify for the CRC on its own, you may be able to register independently of the rest of your group. This is known as disaggregation of a Significant Group Undertaking (SGU). If you want to register independently (disaggregate) you will need to contact the Environment Agency as soon as possible. Your parent organisation will need to register first by 31 July 2010 and indicate which group members it plans to disaggregate. The Environment Agency extended this deadline from 30 June 2010. You will still need to complete registration and disaggregation by 30 September 2010.
Environment Agency: Qualification and registration
When you register you will need to pay the registration fee of £950 and provide:
- information about your organisation including details about any subsidiary companies
- identification information for the person(s) responsible for your organisation’s participation in the CRC
- a list of all your organisation’s HHM settled on the half hourly market
- the total half hourly electricity you used between 1 January 2008 and 31 December 2008. You may estimate this quantity.
You will have to pay a subsistence fee of £1,290 for your online registry account.
If you qualify as a participant, and you fail to register between 1 April 2010 and 30 September 2010:
- you can be fined £5,000 plus a further £500 for each subsequent working day of delay up to a maximum of 80 working days
- your non-compliance will be published.
You will also have to measure and record your business’ half hourly electricity consumption between 1 April 2010 and 31 March 2011. You can ask your energy supplier to provide you with an annual statement of consumption that will help you do this. You must submit a footprint report and annual report on your emissions online between 1 April 2011 and 29 July 2011.
If you need to make an information disclosure in the first compliance year
If your half hourly metered electricity supply was below 6,000MWh in 2008 you will have to make an information disclosure between 1 April 2010 and 30 September 2010.
If your half hourly metered electricity supply was below 3,000 MWh you still need to make an information disclosure but you do not need to report any data on your electricity consumption. You only need to provide your organisation’s contact details and tick the appropriate box in the online form.
If your half hourly metered electricity supply was 3,000 MWh or more you need to:
- make a list of the meter numbers from your half hourly meters
- add together the electricity supplies from all the half hourly meters you have for the period 1 January 2008 to 31 December 2008
- make sure you did not receive qualifying supplies of more than 6,000 MWh through half hourly meters during that period - if you did, you must comply fully with CRC
- use the online CRC registry to submit your information disclosure.
If you are required to make an information disclosure between 1 April 2010 and 30 September 2010, but fail to do so you can be fined £500 for each settled half hourly meter you did not disclose and your non-compliance will be published.
Further information on the CRC Energy Efficiency Scheme
CRC Energy Efficiency Scheme Order 2010 SI 768
DECC: The CRC User Guide
DECC: CRC Energy Efficiency Scheme
Environment Agency: CRC Energy Efficiency Scheme
Environment Agency: Interactive CRC timeline
Northern Ireland Environment Agency (NIEA): CRC Energy Efficiency Scheme
SEPA: Carbon reduction
In this guideline
What is climate change
Calculate your business' carbon footprint
Reduce your impact on the climate
Adapt to climate change
Offset your business' carbon footprint
Comply with the CRC Energy Efficiency Scheme
Climate change levy (CCL)
Trade your emissions - emissions trading scheme
Further information on climate change
Climate change legislation
