Supermarkets,
hotels, manufacturers and public bodies
to play their part in tackling climate change
New rules that come
into force today will pitch some of the
UK’s largest organisations against each
other in a drive to cut carbon dioxide (CO2)
emissions.
For the first time large
non-energy intensive organisations, which
account for about 10% 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.
The Government scheme,
known as the CRC Energy Efficiency Scheme,
will include household names such as Sainsbury’s,
Tesco, Marks & Spencer, John Lewis,
Barclays, HSBC, Hilton and Marriott. It
will also include manufacturers and construction
companies, for example Procter & Gamble,
Unilever and Balfour Beatty. These businesses
will be ranked according to reductions in
energy use and improvements in energy efficiency
alongside public sector organisations such
as NHS trusts, local authorities and government
departments.
Analysis for the Environment
Agency suggests that the scheme could reduce
CO2 emissions by up to 11.6 million tonnes
per year by 2020 - the equivalent of taking
four million cars off the road. It is also
expected to save organisations money through
reduced energy bills – benefiting the economy
by at least £1billion by 2020.
More than 20,000 organisations
will have to register with the Environment
Agency by the end of September this year.
Around 5,000 of these organisations – those
that used at least 6,000 Megawatt hours
(MWh) of half hourly metered electricity
in 2008 – will have to report their emissions
and, from 2011, buy allowances for every
tonne of CO2 they emit. During the introductory
phase in 2011 and 2012, allowances will
be sold at a fixed price of £12 per
tonne of CO2.
All the money raised
from allowance sales will be recycled back
to participants according to their energy
performance. The best performers will get
more money back than they paid, while poor
performers will get less. From next year,
the Environment Agency will publish an annual
league table highlighting the best and worst
performers in CRC.
From 2013 a cap and
trade system will be introduced. This will
limit the total amount of carbon dioxide
these organisations can emit by capping
the total number of allowances available
and selling them at auction.
A further 15,000 organisations
that use less than 6,000MWh, but still have
at least one half hourly electricity meter,
will be obliged to register and declare
their electricity use.
Tony Grayling, Head
of Climate Change and Sustainable Development
at the Environment Agency said:
“The CRC Energy Efficiency
Scheme is an opportunity for organisations
to do their bit for the planet and save
money.
“The league table is
a very public judgement on how seriously
you take your environmental responsibilities.
If organisations don’t take up the challenge,
there is a risk to their reputation and
their pockets.”
The biggest CO2 savings
are likely to come from hotels, restaurants,
retail and the public sector. For the majority
of these organisations, better management
of heating, lighting and computer systems
will yield quick results.
“Carbon reduction doesn’t
need to be complicated or expensive,” says
Tony Grayling, “There are simple and inexpensive
steps every organisation can take to cut
their energy consumption – from motion sensors
for lighting in offices to higher efficiency
motors in manufacturing.”
Organisations that qualify
for CRC must register for the scheme with
the Environment Agency by 30 September 2010.
ENDS
Media enquiries: 020
7863 8710 or outside normal office hours
on 07798 882 092 or email pressoffice@environment-agency.gov.uk.
Notes to Editors
For further information on the CRC Energy
Efficiency Scheme visit www.environment-agency.gov.uk/crc.
Organisations affected
by CRC can also contact the Environment
Agency’s CRC helpdesk at crchelp@environment-agency.gov.uk.
To join a mailing list
to receive regular updates on CRC click
here.
Who qualifies for CRC?
All public and private sector organisations
that had at least one half-hourly electricity
meter (a meter that records energy use every
30 minutes) settled on the half hourly market
during calendar year 2008 must register
as a participant or make an information
disclosure under the CRC Energy Efficiency
Scheme with the Environment Agency between
1 April and 30 September 2010. This will
account for approximately 20,000 large organisations.
Around 5,000 of these
organisations will also be Participants
in the scheme. Participants are identified
by their 2008 electricity supplies: If the
organisation has a half-hourly electricity
meter and consumed at least 6,000 Mega-Watt-hours
of qualifying electricity through all of
its meters during 2008 (equivalent to an
annual 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 need to make an information disclosure
via the CRC Registry on the Environment
Agency’ website. They will not have to monitor
and report their annual energy use or purchase
allowances.
Top 10 sectors affected
by CRC:
Engineering;
Plastics / chemicals;
Public sector;
Packaging / paper / board;
Estates / construction / real estate;
Hotels / restaurants;
Steel;
Food manufacturing;
Retail;
Printing
How the CRC Energy Efficiency
Scheme works
The CRC Energy Efficiency Scheme will be
phased in over three years. Once fully operational,
CRC Participants (about 5,000 organisations)
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 first main sale of allowances
happens in April 2011, covering projected
CO2 emissions for April 2011 to March 2012.
These allowances will be sold by Government
for £12 per tonne of CO2.
After the three-year
introductory phase, the total number of
allowances will be capped, and these allowances
will be auctioned, rather than sold at a
fixed price. As a result, the cost of purchasing
allowances should become higher making it
financially more attractive for CRC Participants
to reduce their CO2 emissions by introducing
energy saving measures.
The scheme is revenue
neutral overall, meaning all revenue raised
from the main sale is re-distributed back
to Participants according to their position
in the annual Performance League Table.
As a consequence, Participants
successful in reducing energy consumption
will not only save money on energy bills,
but will need to purchase fewer allowances
and will receive greater financial reward
through revenue recycling. These savings
should be well in excess of the costs of
participating in the scheme.
Participants that perform
well will also be placed higher in the Performance
League Table, which will be published annually
by the Environment Agency. Being higher
up the league table will have the added
benefit of enhancing the organisation’s
reputation.
What is the role of
the Environment Agency?
The Environment Agency is the lead UK administrator
for the scheme and will run the CRC Registry.
We are also the scheme regulator for England
and Wales. As part of this work, we are
working with organisations to help them
understand their obligations and will provide
as much guidance and information as is possible.
However, if organisations
fail to comply with appropriate deadlines
or provide inaccurate information, this
may result in civil sanctions and fines.
The scheme will be audited and enforced
by the Environment Agency in England and
Wales. The Scottish Environment Protection
Agency will audit and enforce in Scotland,
and the Northern Ireland Environment Agency
will do the same in Northern Ireland.
The Environment Agency
is also a Participant in the CRC. Our own
target is to reduce our carbon emissions
by 33% [22,000 tonnes] by March 2015 from
2006/07 levels, including our transport
emissions which are outside the CRC.
