October 30th, 2012 / Insight posted in

Will you be affected by the Government’s drive to meet CO2 emissions reductions?

The Carbon Reduction Commitment scheme (CRC) is designed to meet the target of reducing UK emissions by 80% from 1990 levels and is aimed at large organisations not covered by the European Union Emissions Trading Scheme.

Broadly speaking, organisations that consumed more than 6GWhs during the 2008 calendar year (the qualification period) will be a full participating member of CRC. Those consuming more than 3GWhs must make a CRC emissions statement, and we expect they will be introduced to the full scheme at a later date.

The CRC scheme requires participating members to buy sufficient allowance to cover their emissions at a current guide price of £12/tCO2 but this is subject to change. Depending on an organisation’s performance relative to others, a repayment of allowances or additional surcharge will occur. Consequently, CRC scheme performance will become a KPI for those involved.

All the organisations believed to be affected by CRC have already been contacted and, as a result, these companies should be undertaking the necessary steps to register and reduce their energy usage and in turn their carbon footprint.

While not directly affected there will be opportunities for SMEs in the clean and green sectors as the large organisations covered by the scheme seek to improve their performance and take advantage of innovative energy saving solutions. On the downside large users may require suppliers to ‘sign-up’ to energy efficient practices, push energy consumption onto suppliers or renegotiate terms based on energy usage commitments.

Focus on energy usage will only increase and, in the longer term, the CRC regime could easily be moved down the scale of energy consumption eventually compelling SMEs to provide the regulators with energy usage data that may not be readily available.

If you would like further information on the CRC regulations or would like to discuss the ways in which your business might be able to take advantage of the opportunities they present contact Jon Sutcliffe, Head of Technology sector,jsutcliffe@mks.co.uk