CRC Energy Efficiency Scheme
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The CRC Energy Efficiency Scheme (the CRC, formerly the Carbon Reduction Commitment) was a mandatory carbon emissions reduction scheme in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
which applied to large energy-intensive organisations in the public and private sectors. It was estimated that the scheme would reduce
carbon emissions Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide (), from burning fossil fuels such as coal, petroleum, oil, and natural gas, is the main cause of climate chan ...
by 1.2 million tonnes of carbon per year by 2020.Action in the UK - Carbon Reduction Commitment
, '' DEFRA'', published 2007-05-23, accessed 2007-05-23
In an effort to avoid dangerous climate change, the
British Government His Majesty's Government, abbreviated to HM Government or otherwise UK Government, is the central government, central executive authority of the United Kingdom of Great Britain and Northern Ireland.
first committed to cutting UK carbon emissions by 60% by 2050 (compared to 1990 levels), and in October 2008 increased this commitment to 80%. The scheme has also been credited with driving up demand for energy-efficient goods and services. The CRC was announced in the 2007 Energy White Paper, published on 23 May 2007. A consultation in 2006 showed strong support for it to be mandatory, rather than voluntary. The Commitment was introduced under enabling powers in Part 3 of the
Climate Change Act 2008 The Climate Change Act 2008 (c 27) is an Act of the Parliament of the United Kingdom. The Act makes it the duty of the Secretary of State to reduce net greenhouse gas emissions, toward avoiding dangerous climate change. The Act aims to enab ...
. A consultation into the scheme's implementation was launched in June 2007. The Scheme was introduced under the CRC Energy Efficiency Scheme Order 2010. The Conservative Government withdrew the scheme in 2019.


Performance league table

The first performance league table was published on 8 November 2011. It was based on the scheme's early action metric, which is a measure of good energy management prior to the establishment of an energy baseline. In the future the table will use a growth and an absolute metrics from this baseline. The table is expected to be particularly useful to ethical and green investors. Many notable brands are listed in the League table including the big four supermarkets,
Asda Asda Stores Limited (), trading as Asda and often styled as ASDA, is a British supermarket and petrol station chain. Its headquarters is in Leeds, England. The company was incorporated as Associated Dairies and Farm Stores in 1949. It expanded ...
(37),
Morrisons Wm Morrison Supermarkets Limited, trading as Morrisons, is the List of supermarket chains in the United Kingdom, fifth largest supermarket chain in the United Kingdom. As of 2021, the company had 497 supermarkets across England, Wales and Sco ...
(56),
Tesco Tesco plc () is a British multinational groceries and general merchandise retailer headquartered in the United Kingdom at its head offices in Welwyn Garden City, England. The company was founded by Jack Cohen (businessman), Sir Jack Cohen in ...
(93), and
Sainsbury's J Sainsbury plc, trading as Sainsbury's, is a British supermarket and the second-largest chain of supermarkets in the United Kingdom. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company was the largest UK r ...
(164). In all 22 organisations shared first position, news stories focused on the fact that Manchester United Football Club was one of those at the top of the table. It has been announced that after July 2013, these league and performance tables will no longer be published, and will instead be replaced by a publication of participants' energy use and emissions.


Coverage

The CRC scheme will apply to organisations that have a half-hourly metered electricity consumption greater than 6,000
MWh A kilowatt-hour ( unit symbol: kW⋅h or kW h; commonly written as kWh) is a non-SI unit of energy equal to 3.6 megajoules (MJ) in SI units, which is the energy delivered by one kilowatt of power for one hour. Kilowatt-hours are a commo ...
per year. Organisations qualifying for CRC would have all their energy use covered by the scheme, including emissions from direct energy use as well as electricity purchased.2007 Energy White Paper: Meeting the Energy Challenge
, ''
Department of Trade and Industry Department of Trade and Industry may refer to: Current * Department of Trade and Industry (Isle of Man) * Department of Trade and Industry (Philippines) * Department of Trade, Industry and Competition (South Africa) Former * Department of Trade ...
'', published 2007-05-23, accessed 2007-05-25
Such organisations - including hotel chains, supermarkets, banks, central government and large
Local Authorities Local government is a generic term for the lowest tiers of governance or public administration within a particular sovereign state. Local governments typically constitute a subdivision of a higher-level political or administrative unit, such a ...
- mostly fall below the threshold for the
European Union Emissions Trading Scheme The European Union Emissions Trading System (EU ETS) is a carbon emission trading scheme (or ''cap and trade'' scheme) that began in 2005 and is intended to lower greenhouse gas emissions in the EU. Cap and trade schemes limit emissions of spec ...
, but account for around 10% of the UK
carbon emissions Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide (), from burning fossil fuels such as coal, petroleum, oil, and natural gas, is the main cause of climate chan ...
. Emissions covered by the EU Energy Trading Scheme and by a Climate Change Agreement would be exempt from the CRC, as would organisations with more than 25% of their emissions covered by Climate Change Agreements. Half-hourly meters (HHM) record electricity consumption for every half-hour of every day, and generally provide this data to the supplier automatically via a telephone connection. Some organisations with high annual energy consumption do not use HHM, as their supplies are mainly on unrestricted or Economy 7 (day/night or 'evening and weekend') tariffs. However, they may nevertheless have to provide 'footprint reports'.


Operating mechanisms

Although mandatory, the CRC will involve self-certification of emissions, backed up by spot audits, as opposed to third-party verification. Emission allowances are to be auctioned rather than grandfathered (as was the case in the initial stages of the EU Emissions Trading Scheme). The original proposal envisaged a revenue recycling mechanism, however this was removed to support the public finances after the comprehensive spending review. The Government announced in the budget the allowance price of £12/tCO2 for the first sale. They have also suggested there should be two fixed price sales in the first year of the scheme.


Simplification

On 30 June 2011 the Government announced its initial proposals on simplifying the scheme. This came from the dialogue process the Department of Energy and Climate Change had been running from January, which was in response to the concerns of those organisations participating in the scheme that it was overly complex and this made compliance difficult and costly. The draft legislative proposals will be published in early 2012 for formal public consultation which will amend the existing CRC scheme. Among these proposals will be, continuing the fixed price sale (rather than auctions of allowances in a capped system) into the second phase, as recommended by the Committee on Climate Change, provide business with greater flexibility by allowing organisations to participate as natural business units, reducing the number of the fuels which are subject to the scheme from 30 to 4, removing the complex 90% rule and CCA exemption rules, whilst achieving broadly the same outcomes) and reducing overlap with other government schemes such as EU Emission Trading Scheme and Climate Change Agreements.


Criticism

It has been suggested that the effectiveness of the CRC is limited by its overlap with the EU ETS. Critics argue that as companies reduce their electricity consumption, power stations produce less electricity and so require fewer
EU Allowances EU Allowances (EUA) are climate credits (or carbon credits) used in the European Union Emissions Trading Scheme (EU ETS). EU Allowances are issued by the Member state of the European Union, EU Member States into Member State Registry accounts. By ...
; other entities covered by the ETS are then able to use these allowances for their own emissions. It has been suggested that allowances should be removed from the ETS in accordance with electricity reductions made under the CRC.


See also

*
Climate Change Act 2008 The Climate Change Act 2008 (c 27) is an Act of the Parliament of the United Kingdom. The Act makes it the duty of the Secretary of State to reduce net greenhouse gas emissions, toward avoiding dangerous climate change. The Act aims to enab ...
*
The Green Deal The Green Deal was a UK government policy initiative that gave homeowners, landlords and tenants the opportunity to pay for energy efficient home improvements through the savings on their energy bills from 2012 to 2015. At the heart of the Gr ...
* Climate Change Agreement *
Capital allowance Capital allowances is the practice of allowing tax payers to get tax relief on capital expenditure by allowing it to be deducted against their annual taxable income. Generally, expenditure qualifying for capital allowances will be incurred on speci ...
*
Energy policy of the United Kingdom The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy i ...
*
Energy use and conservation in the United Kingdom Total energy consumption in the United Kingdom was 142.0million tonnes of oil equivalent (1,651TWh) in 2019. In 2014, the UK had an energy consumption ''per capita'' of 2.78tonnes of oil equivalent (32.3MWh) compared to a world average of 1 ...
*
Renewables Obligation The Renewables Obligation (RO) is a market support mechanism designed to encourage generation of electricity from eligible renewable sources in the United Kingdom. There are three related schemes for the three legal jurisdictions of the UK. In ...
* United Kingdom Climate Change Programme * Feed-in tariffs in the United Kingdom


References


External links


DECC: CRC Energy Efficiency SchemeCRC case studies: participantsCRC case studies: providers CRC Performance League Table

2007 Energy White PaperEA: CRC Energy Efficiency SchemeCarbon Reduction Commitment Working Group on 2degreesThe CRC Network: a free, independent forum on CRC best practiceCRC User Guide and Guidance Documents - Department of Energy and Climate ChangeThe CRC Energy Efficiency Scheme Order 2010
{{Energy in the United Kingdom, govreg Carbon emissions in the European Union Climate change policy Energy conservation in the United Kingdom