Carbon Reduction

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Carbon Reduction Commitment (CRC)

What is it?

In May 2007, the government published the Energy White Paper and announced its
decision to implement a new emissions trading scheme – the CRC. The scheme
introduces mandatory emissions trading to cut CO2 emissions and requires that
organisations purchase allowances – priced commodities (£/tonne) – that are to cover the equivalent amount of CO2 an organisation produces from its operations in a year.

The idea is that use of market mechanisms encourages organisations to become leaner in their energy usage as CO2 becomes associated with a definable financial reward or cost. The original scheme keeps changing, at the moment it is a simple “purchase” scheme, at £12 per tonne of CO2 produced.

Does it apply to my Firm

The CRC applies to large commercial and public sector bodies (including supermarkets, hotel chains, government departments, large local authorities) whose total annual half-hourly metered electricity use is above 6,000 MWh per annum. As a general rule of thumb, businesses with a total annual electricity bill of £500,000 or more will be covered by the scheme.

  • You will be on half hourly meters

  • You should have been sent a pack by now if you are to be included

  • You will use more than 6000M/W of electricity to be in the trap (approx. £500k of spend)

  • If you are on half hourly meters but use less than 6000M/W per annum, you will be an “Information Declarer” and will need to send in Annual Reports

  • All half hourly metered Companies must register with the Environment Agency

  • Your whole Company needs to be considered, this means head office, warehouses, other “related” companies in the Group and all shops.

Is this all now set in stone

  • No, the Government keeps changing its mind and there is a review going on at the moment, likely to be firmed up by October, however;

  • You must abide by the old rules until the new ones come in, and should we well on with your paperwork by now, or face legal action from the Environment Agency. The fine for failing to register is £500 per day for up to 80 days.

What should we have done, and what should we be doing

There are three basic sections that the Government has called “Metrics”;

  • The Early Action Metric (setting yourself up on the scheme, registering with the Environment

  • Agency and sending in your first “baseline” report called the “Footprint Report”). This should have been done by now.

  • The Absolute Metric (this is your actual annual position); first annual report should have been sent in.

  • The Growth Metric (for acquisitions and disposals of companies or parts thereof)

  • We have sat with some companies and worked through all the paperwork.
    If in doubt we can review things for you when we have Project specific details

By now your Footprint Report should have been lodged, and your first Annual Report should have been sent in by 29th July 2011. All the detail regarding what to do, forms to fill in etc. is on the

Government information website;

What will it cost us and I heard there is a league table

  • Currently you will need to buy Carbon Credits which have been pegged at £12 per tonne of carbon used. This was due to be raised in value, and is almost certainly going to be the case in the next 12/18 months, this is all currently being reviewed. The number of credits you need to buy are dependent on the calculations made on your carbon usage.

  • The Government will be issuing a league table in April 2012, but this may change.

  • We charge a daily consultancy fee or can quote.

Can I employ a consultant to sort all this out

  • Yes you can, we can complete all paperwork for you, but the forms are on line and your energy providers will give you all the data you need. If the ownership and control of the buildings are straightforward your internal team may be able to handle this. Our opinion and the evidence we have seen is that most Companies keep the exercise in house. All energy suppliers are now geared up to give CRC compliant statements in March each year.

  • You will need, under the legislation, to self – audit, that is a requirement. Also, you will be externally audited by the Environment Agency, who will undertake a desktop study and if they see any issues have budgeted for spending an additional two days in your company, going into some depth.

  • An evidence pack needs to be produced annually, we can produce this or you can do it yourself, but it is detailed and time consuming. A University Client recently allowed a member of their team to spend a full two weeks producing their pack.

Apart from all this paperwork, what are the practical steps to reduce cost and do well on the League table

  • CRC is all about saving energy. Where consultants come into their own is where savings can be analysed.

  • The starting point is to establish a benchmark of how you are conducting your day to day business, and potential energy saving areas. Consider an overall Energy Management Plan

  • Look for easy wins, with low costs

  • In a Retail environment, use the data in the TM44 Reports to your advantage;

An Assessor will have been into all your outlets and looked at;

  • Whether your maintenance is good enough on a/c

  • Old and dilapidated a/c equipment

  • Gas type used, R22 for instance, and whether you have replacement programmes

  • Lighting used, and therefore heat gain

  • Whether lighting is connected to a/c and heating, and whether this is all connected to locking doors at night

  • Staff awareness, signage and reminders to ensure they know how to use equipment

  • BEMS systems, sub meters and remote monitoring.

  • The above are only parts of a full Energy Management Plan, but results can be good

What others have done

  • Instead of a “cheap and cheerful” TM44, enhance it and request and take advantage of the Assessor being in the premises. Use that information for setting up a Carbon Saving Plan

  • We can spreadsheet all the results from TM44 to seek patterns of problems, again part of the basic first steps

  • If you are not caught in the CRC trap, do this anyway to start the ball rolling on saving money

  • Use a Consultant (we can do this) to put together an action plan, with targeting and monitoring, costed with returns on investment clearly set out

  • Utilise some of the funding schemes if necessary; Siemens and the Carbon Trust have a loan scheme, the savings can pay back the loan over time. We can advise on this.

  • Pilot schemes. Take 10/20 units and run a detailed scheme to look at all aspects, and come up with an overall strategy.

The CRC follows an annual cycle. The first footprint year will be April 2010 to March 2011. Qualification for CRC is based on half hourly electricity consumption during the qualification period. For the introductory phase, this is the 2008 calendar year.



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