CRC and issues facing business

The carbon reduction commitment is a mandatory cap and trade emissions scheme, employed to reduce the volume of C02 emitted in the UK and promote improvements in energy efficiency.

The Carbon Reduction Commitment scheme launched on the 1st April 2010 and is estimated to affect up to 5,000 organisations, who qualify as full participants based on their electricity usage.

An organisation qualifies as a full participant if it has at least one half-hourly electricity meter (HHM) and consumed over 6,000 megawatt-hours (MWh) over the 2008 qualifying year.

Full participants in the Carbon Reduction Commitment scheme will be required to monitor their CO2 emissions and purchase allowances, which are currently quoted at a price of £12 per tonne of CO2.

In April 2011 companies will have to buy allowances for forthcoming year, based on the carbon footprint for the year April 2010 to April 2011. The initial costs to comply to the Carbon Reduction Commitment Energy Efficient Scheme heighten the need to start reducing CO2 emissions.

The revenue earned by the scheme is recycled back to the participants. The Carbon Reduction Commitment League Table is published annually to highlight achievements in reducing CO2 and to distribute revenue in line with performance.