Monitoring and reporting emissions

Environment AgencyRegistration opened for the new CRC Energy Efficiency Scheme on April 1, and qualifying organisations, which include all UK government departments, must register for CRC with the Environment Agency before 30 September 2010.  

Within hours of the registration registry opening, the scheme had both its first Information Declarer and Participant. The registration process takes both time and preparation, and in order to meet the September deadline, organisations should be well underway with registration.  

The CRC Energy Efficiency Scheme is a new mandatory emissions trading scheme designed by the government to help reach its emission targets. According to analysis for the Environment Agency, it could reduce carbon dioxide (CO2) emissions (from around 5,000 participant organisations) by up to 11.6 million tonnes per year by 2020 – the equivalent to taking roughly four million cars off the road.  

For the first time large non-energy intensive organisations, which account for about ten per cent of UK CO2 emissions, will be legally bound to closely monitor and report their emissions from energy use in preparation for carbon trading. The scheme will also give people and businesses the opportunity to compare organisations’ efforts to combat climate change for the first time.

Reaching tough targets
The UK government has made a commitment to reduce greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050. This is a tough target – which will require significant changes in the way businesses and the government operate.

These emissions reductions will be achieved by requiring large organisations to monitor energy consumption and purchase allowances for resulting carbon emissions. Participants successful in reducing energy consumption will not only save money on energy bills, they will also receive financial and reputational rewards. These savings should be well in excess of the costs of participating in the scheme.

Both information declarers and full participants need to register via the online registry by September 30. Following registrations, participants will need to submit a footprint report once per phase, report on emissions annually and maintain an evidence pack relating to energy use. From 2011 onwards, participants will also need to hold and surrender sufficient allowances to cover their energy use emissions covered by the scheme.

CRC participants will have to pay a one-off registration fee of £950 and an annual subsistence fee of £1,290 each year. While there are costs involved, savings made through reducing energy consumption will far outweigh the fees. There are no fees for information declarers.  

A mandatory scheme
Registration for the scheme is a legal obligation affecting both private and public sector organisations. Alongside engineering companies, banks, hotels and utility companies, the public sector is one of the top ten sectors affected by the CRC scheme.

As the lead administrator for the scheme, the Environment Agency wants to ensure that everyone registers correctly and is in position to provide an accurate annual report on energy use by July 2011.

We are working with organisations to help them understand their obligations and will provide as much guidance and information as is possible. To support this, since April 2009, we have had a CRC helpdesk in place to answer questions. However, failure to comply with appropriate deadlines or providing inaccurate information may result in civil sanctions and fines.  

Compliance with the CRC Energy Efficiency Scheme will require financial, audit and carbon management adjustments to be made by participating organisations. By planning and preparing for these now, participating organisations can not only make sure they fulfil their legal duty, but that they can make the most of the opportunities offered by the scheme in cutting energy bills, reducing upfront CRC payments, increasing payouts from the scheme and enhancing their reputation.

How the scheme will reduce emissions
The CRC Energy Efficiency Scheme will be phased in over three years. Once fully operational, CRC participants (not information declarers) will be required to monitor their emissions and purchase allowances for each tonne of CO2 they emit at the beginning of each reporting year. The scheme is revenue neutral overall, meaning all revenue raised from selling allowances is re-distributed back to participants according to their position in the annual Performance League Table.

As a consequence, reducing carbon emissions means participants will save money on their energy bill, will purchase fewer allowances and receive greater financial reward through revenue recycling. participants that perform well will also be placed higher in the Performance League Table, which will be published annually by the Environment Agency. In an age of an eco-conscious public, being higher up the league table will have the added benefit of enhancing the organisation’s reputation.

Greater flexibility
The Environment Agency has also given CRC participants greater ability to showcase their previous carbon reduction efforts. The Environment Agency has approved the Certified Emissions Measurement And Reduction Scheme (CEMARS®) as counting towards the CRC Energy Efficiency Scheme Early Action Metric.Previously only the Carbon Trust Standard was recognised as counting towards the early action metric, which rewards organisations who voluntarily undertake good energy management practices before joining CRC.

The decision to approve CEMARS follows extensive consultation with businesses, the public sector and environmental NGOs and means CRC participants now have a choice of scheme and an alternative avenue for gaining credit for previous efforts to reduce carbon emissions.   
CEMARS is the first Carbon Trust Equivalent Scheme to be approved by the Environment Agency, but others are currently being considered. All equivalent schemes will be rigorously assessed through an application process and must meet a range of requirements, including demonstration of an annual carbon reduction.

Along with the Carbon Trust Standard, CEMARS allows organisations that are leading the way in environmental management to be rewarded for their efforts to date. Expanding the early action metric to include alternative schemes will make it simpler for participants to show exactly how much genuine engagement they had with emissions management and reduction prior to joining CRC.

Requirements for the public sector
All government departments are participants in the CRC Energy Efficiency Scheme, regardless of their energy consumption. Other public sector bodies, such as non-departmental public bodies and public corporations, must also register for the scheme by 30 September 2010 if they have a settled half-hourly electricity meter. These organisations may also be participants in the scheme if they meet the qualification threshold.

This threshold is determined by 2008 electricity consumption: If the organisation has a half-hourly electricity meter and consumed at least 6,000 megawatt-hours of electricity through all of its meters during 2008 (equivalent to an electricity bill of around £500,000), then it will need to participate in the scheme by monitoring energy consumption and purchasing allowances.

However, if the organisation has a half-hourly electricity meter but consumed less than this amount of electricity, it will be an information declarer. This means that all it will need to do is identify its half-hourly meters. It will not have to purchase allowances.

There are serious penalties for eligible organisations if they do not register with CRC by the end of the registration period – they will be handed a fixed fine of £5,000, then for each subsequent working day they fail to register they will be fined an additional £500 per day, for a maximum of 80 working days, together with a publication of non-compliance. It is therefore essential that eligible organisations register before 30 September 2010.

Leading the way
Environment Agency research shows that around a quarter of the emissions from these sectors could be cut at no overall cost. Carbon reduction doesn’t need to be complicated or expensive. In most cases the savings on energy bills will outweigh the costs of the energy saving measures. There are simple and inexpensive steps every organisation can take to cut their energy consumption – from motion sensors for lighting to slightly reducing room temperatures.

For those organisations not convinced by the financial benefits of energy efficiency, the annual league table of the best and worst performers in the CRC could be the incentive they need to start putting energy efficiency at the top of the corporate agenda.

The league table is a public statement on carbon efficiency and in this age of eco conscious consumers, organisations will need to perform well to have the edge on competitors. If organisations don’t take up the challenge, there is a risk to their reputation and their pockets.

Help is at hand
The CRC Energy Efficiency Scheme is administered across the UK by the Environment Agency. The scheme is regulated by the Environment Agency in England and Wales, the Northern Ireland Environment Agency in Northern Ireland, and the Scottish Environment Protection Agency in Scotland.

The Environment Agency website has a range of tools to help explain CRC, along with in-depth information on registering and adhering to CRC.  Organisations with questions are encouraged to read through the FAQs section or contact the dedicated CRC helpdesk. Since registration opened, the CRC helpdesk has handled around 350 calls and over 300 e-mails each week. The volume of enquires shows that most businesses are well underway with their registration and seeking assistance with technicalities.

The Environment Agency also published new CRC guidance in March, which contain information for CRC participants on preparing and submitting an Annual Report and Footprint Report. These reports will need to be submitted by around 5,000 CRC participants in July 2011.

Further supporting documents have also been published which explain the rules of CRC and cover areas such as organisational change, estimation techniques, supply rules and the interaction of the EU Emission Trading Scheme (ETS) and Climate Change Act with CRC.

Don't leave it to the last minute
As a mandatory scheme, organisations must register by 30 September or face possible fines.  The registration process will take some time, so those organisations that are not yet underway with registration are encouraged to do so now. 

There are more reasons to comply with CRC than to avoid a fine. Adhering to CRC will save organisations money through reduced energy bills, and help contribute to the UK’s emission reduction targets. And perhaps most importantly, the CRC performance league table will ensure the public, business and government, know exactly which organisations are leading the way in carbon reduction.  

Examples of simple ways to reduce CO2 emissions
Heating
• Set temperature levels appropriate to the space, its use and occupation levels
• Audit your heating controls to find out when your heat comes on and goes off
• Upgrading heating systems to more efficient ones
• Improve insulation
• Install double glazing
• Service boilers every year – a regularly serviced boiler can save up to 10 per cent on heating costs

Lighting    
• Switch off non-essential lights – iincluding those near windows
• Label light switches to make it easier for people to control individual rows of lights
• Switch to energy efficient lighting systems
• Install motion sensors so that lights go off automatically if nobody is using an area

Office Equipment    
• Use plug-in time switches to switch off electrical items such as printers after hours
• Switch off any non-essential or seldom-used equipment
• Install power saving devices which switch off PC monitors when they are not in use e.g. The eco-button
• Use flat screen monitors – they can reduce monitor energy use by two thirds as well as saving space
• Enable energy saving features on your appliances, and reduce energy consumption by up to 30 per cent
• Position photocopiers and printers in ventilated spaces or in cool areas such as the north side of a building, so that machines don’t waste energy working overtime to stay cool, and can even reducing heating or air conditioning demand

For more information
For more information about the CRC Energy Efficiency Scheme and to download the CRC Registration Guidance, see www.environment-agency.gov.uk/crc
For assistance or queries about the scheme, contact the helpdesk at crchelp@environment-agency.gov.uk
You can make an action plan for reducing your organisation’s energy use on the Carbon Trust website www.carbontrust.co.uk

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