The Carbon Reduction Commitment
and the Carbon Standard
Did you know you could get paid for reducing your CO2 emissions?
The Carbon Reduction Commitment (CRC) is a legally binding scheme covering those large business and public sector organisations which meet the following two criteria:
1. An electricity consumption for the 12 months between 1st Jan 2008 and 31st Dec 2008 greater than 6,000 MWh.
2. Electricity consumption recorded by half hourly meter readings.
Organisations already covered under EU Emissions Trading Scheme (ETS) and Climate Change Agreements (CCA) will be excluded.
If your organisation qualifies, then from 2010 you will be legally obliged to calculate the CO2 embedded within the following energy types used within your organisation: electricity, gas, and other fuels e.g. LPG.
Transport emissions are excluded in year 1, but business travel will be included in subsequent years. There are also various rules concerning on-site generation of electricity such as CHP and Green Tariff electricity purchasing, but as a rule of thumb for the purposes of calculating your CO2 emissions, these potentially carbon neutral energy supplies are included within your calculations as if they were generated by 'traditional' means.
Once your CO2 emissions have been calculated, you will be required to buy your way into a league table. The cost has been set at £12 per tonne of CO2 generated. You will be assigned a position in the league depending on your emissions. All organisations within the league table will contribute into the fund pot, which will then be redistributed amongst the top 50% of the league table. Defra intends this to be a cost neutral activity for them, it is not a tax raising initiative, all funds paid in will be recycled back to the organisations in the league. The better your performance, the higher your league table position and therefore the more funds you will receive.
It is intended that you will be able to buy and sell CO2 credits through the year and you will be able to trade with them. This is similar to the EU ETS scheme in design. It is expected that companies will calculate their CO2 emissions as the year progresses and purchase or sell CO2 credits month on month as required. Whilst the price of credits is fixed, this activity is not an issue, however, if the price is allowed to fluctuate (as it does with EU ETS) then credits do become a commodity in their own right and companies leaving their purchases to the end of the year see the price increase dramatically. Measuring your CO2 emissions on a regular basis then becomes vitally important.
There are two activities that organisations can undertake to improve their starting position in the league table even before the scheme commencement date of 2010:
Firstly, ensure all of their electricity supply is metered by half-hourly meters. Secondly, be audited against the Carbon Trust Standard, a scheme specifically designed for the CRC. The Standard requires you to do three things:
1. Measure (i.e. baseline your organisation)
2. Identify Savings
3. Implement (and quantifiably prove reduction in CO2 emissions)
It is expected that organisations implementing both improvement activities will be placed in the top 50% of the league table, and potentially receive more back than they put in. In future years, your position in the league will be dependant on your ability to reduce your CO2 emissions year-on-year. It should also be noted that the scheme entry point of 6,000 MWh is expected to be reduced to increase the number of organisations included within the scheme. Organisations close to the threshold are advised to prepare for inclusion in the future.
The experts at Abricon believe that the adoption of the Carbon Trust Standard is a good idea as it is likely, at a bare minimum, to allow you to recover your costs of paying into the league table. However, the Standard is not free and the Carbon Trust provides two prices. The first is for accreditation against the Standard, and the second is for their help in achieving the Standard.
Abricon is pleased to be able to offer subsidised assistance to achieve the Carbon Trust Standard, therefore greatly reducing your implementation costs.
Check to see which of Abricon's Government funded schemes can be used to help achieve The Carbon Trust Standard, and meet your obligations under the CRC.
Further information about CRC can be found on the Defra website at:
http://www.defra.gov.uk/environment/climatechange/uk/business/crc/index.htm
Details of the Carbon Trust Standard can be found at:
http://www.carbontruststandard.com/
Contact Abricon for an initial discussion and free, impartial advice.
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