Environmental guidance for your business in Northern Ireland & Scotland

The CRC Energy Efficiency Scheme

Under the Kyoto Protocol, European Union member states agreed to reduce emissions of greenhouse gases - such as CO2 - by 8 per cent below 1990 levels by 2012. The second phase of the Kyoto protocol requires a 20% reduction by 2020. The UK has agreed to go further than this, and aims to reduce its emissions by 34 per cent below 1990 levels. The UK is also obliged to cap its overall greenhouse gas emissions across all industries under the Climate Change Act 2008.

The UK's CRC Energy Efficiency Scheme is an incentive to improve energy efficiency in large public and private sector organisations. The scheme is regulated by:

  • In Northern Ireland: The Northern Ireland Environment Agency (NIEA)
  • In Scotland: The Scottish Environment Protection Agency (SEPA).

The Environment Agency is the overall scheme administrator and will manage the online registry and the sale of carbon allowances for the whole of the UK.

Phase 1 of the CRC Energy Efficiency Scheme ended on 31 March 2014. Phase 2 will run from 1 April 2014 until 31 March 2019. The Government has introduced a number of changes to how the Scheme operates; some have already taken effect and some will apply from the start of phase 2.

This guide explains how the CRC Energy Efficiency Scheme works, which businesses are affected and how you can comply with the scheme.

The CRC Energy Efficiency Scheme covers about 10 per cent of CO2 emissions in the UK. Scheme participants are typically large non-energy-intensive organisations within the UK's public and private sectors.

The aim of the CRC is to act as a financial driver to encourage energy efficiency through changes in behaviour and infrastructure.

The Scheme targets emissions not already covered by the European Union Emissions Trading System (EU ETS). This is a greenhouse gas ETS that covers the energy intensive sectors of EU member states - including the power generation, cement, glass, pulp and paper industries.

It also does not overlap with emissions covered by Climate Change Agreements, which entitle energy-intensive businesses in the UK to a discount from the Climate Change Levy in exchange for meeting energy efficiency or carbon saving targets.

Further information

Department of Energy and Climate Change (DECC): Climate change agreement

GOV.UK: CRC - Guidance for participants in phase 2

NIEA: CRC Energy Efficiency Scheme information

DOENI: CRC Energy Efficiency Scheme information

Scottish Government: CRC Energy Efficiency Scheme information

NIEA: EU Emissions trading scheme

SEPA: EU Emissions trading scheme

The CRC Energy Efficiency Scheme is divided into several phases. Any organisation required to take part in the CRC Scheme will have to register at the beginning of the phase, and subsequently monitor their annual energy usage for the phase duration . They will have to buy allowances from Government and surrender these each year equal to their associated annual emissions. If they don't, they may face financial penalties.

The Environment Agency will publish data on participant’s annual emissions. This replaces the Performance League tables which were published for emissions in 2011/2012 and 2012/2013.

Following Government consultation the CRC energy Scheme has been simplified. You can find details of the changes from the Environment Agency website. These changes apply across the UK.

GOV.UK: CRC - Guidance for participants in phase 2

Further information

NIEA: CRC Energy Efficiency Scheme information

DOENI: CRC Energy Efficiency Scheme information

Scottish Government: CRC Energy Efficiency Scheme information

Participation in Phase 2 of the CRC Energy Efficiency Scheme

You will qualify for participation if your organisation was supplied with at least 6,000 MWh of electricity, through settled half hourly meters, between 1 April 2012 and 31 March 2013.

If your business or organisation qualifies you will have registered between 4 November 2013 and 31 January 2014.

You will then need to monitor and report your energy use for five compliance years beginning 1 April 2014.

Organisations likely to qualify for participation in the CRC Energy Efficiency Scheme include:

  • supermarkets
  • hotels
  • water companies
  • banks
  • Local Authorities

All Northern Ireland government departments must participate in the CRC Scheme

Businesses that are part of a larger group must consider qualification as a whole under their highest parent organisation. If the highest parent company is based overseas, then a 'primary member' based in the UK must be nominated to represent the entire group.

In Phase 1, following registration, parts of the group may disaggregate parts if they would qualify in their own right under the scheme. You cannot disaggregate parts of a business if that takes the total energy consumption of each part below the threshold for participation.

In Phase 2 the disaggregation rules will be relaxed and any part of a group will be able to disaggregate from the parent and participate in the scheme in its own right.

If you have any queries about the CRC Energy Efficiency Scheme you can contact the CRC helpdesk.

CRCHelpdesk

In Scotland you can contact the SEPA CRC team

SEPA CRC Team

In Northern Ireland you can contact the DOE Climate Change Unit

DOE Climate Change Unit

Further information

Environment Agency: Assessing qualification and registering for Phase 2

GOV.UK: CRC - Guidance for participants in phase 2

NIEA: CRC Energy Efficiency Scheme information

DOENI: CRC Energy Efficiency Scheme information

Scottish Government: CRC Energy Efficiency Scheme information

If your business qualifies for participation in the CRC Energy Efficiency Scheme, there are certain activities you will need to do in order to comply with the Regulations. You will need to:

  • monitor and report your usage of electricity and gas.
  • buy enough allowances to cover your annual emissions and surrender enough allowances to cover your emissions at the end of the compliance year.

Following simplification of the scheme the number of fuels that must be reported has been significantly reduced from 29 to 2. Participants must now report on:

  • Electricity
  • Gas, supplied through the gas distribution network.

100% of these supplies need to be reported subject to some exemptions including:

  • All gas supplies less than 72,200 kWh annually
  • All 01 and 02 metered electricity
  • All domestic usage
  • Any supplies for transport purposes
  • Certain onward supplies.
  • Certain supplies necessary for the generation, transmission or distribution of electricity
  • Certain supplies necessary for the transport, supply and shipping of gas.

Climate Change Agreements (CCA) and EU Emissions Trading Scheme (EUETS)

Supplies to EUETS installations, with the exception of electricity, are not included in Phase 1 of the CRC Energy Efficiency Scheme. This extends to all supplies to installations in Phase 2.

Organisations with a CCA may have been able to claim exemption from the reporting requirements of the CRC in Phase 1. For Phase 2 these exemptions will be removed although all supplies to CCA target facilities will remain outside the scope of the Scheme.

If your business has a CCA or is included in the EUETS you will still need to consider other supplies and may still be required to participate in the CRC Energy Efficiency Scheme.

Guidance for the CRC Energy Efficiency Scheme: Assessing Qualification and Registering for Phase 2

CRC annual report

As a participant in the CRC Energy Efficiency Scheme, you will need to monitor your CRC supplies during each scheme year. By the end of July each year you should provide a CRC annual report of your organisation's CRC supplies to the Environment Agency which will be converted to CO2 for publication. 

Registration fees

You will also need to pay the registration fee of £950, plus an annual subsistence fee of £1,290.

If you don't register by the end of the registration period, you may receive a fine of £5,000 and £500 for each additional working day that you do not register up to a maximum of 80 days.

You can find information on how to register, and how to submit reports on the Environment Agency website.

Environment Agency: The CRC Energy Efficiency Scheme  

If you have any queries about the CRC Energy Efficiency Scheme you can contact the CRC helpdesk.

CRCHelpdesk

In Scotland you can contact the SEPA CRC team

SEPA CRC Team

In Northern Ireland you can contact the DOE Climate Change Unit

DOE Climate Change Unit

Further information

GOV.UK: CRC - Guidance for participants in phase 2

DOENI: CRC Energy Efficiency Scheme information

Scottish Government: CRC Energy Efficiency Scheme information

The CRC Energy Efficiency Scheme consists of several phases. Each phase runs for a set period of time. If your business or organisation qualifies you must participate for the whole phase. Phase 1 started on 1 April 2010 and ran until 31 March 2014.

Phase 2 runs from 1 April 2014 until 31 March 2019.

The qualification period for phase 2 is from 1 April 2012 to 31 March 2013.

After that there will be four more phases, each of five years and a final phase of 4 years starting in April 2039

For each phase, existing and potential participants should:

  • assess electricity supplies during the qualification year so they know whether to participate in that phase

& if they qualify as participants should:

  • register for the Scheme at the right time
  • monitor and report their energy supplies in each reporting year of the phase and
  • buy and surrender allowances each reporting year.

Further information

GOV.UK: CRC - Guidance for participants in phase 2

NIEA: CRC Energy Efficiency Scheme information

DOENI: CRC Energy Efficiency Scheme information

Scottish Government: CRC Energy Efficiency Scheme information

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