Carbon Reduction Commitment explained

The CRC Energy Efficiency Scheme (CRC) is a new government initiative that encourages large businesses to become more energy efficient by reducing their CO2 emissions. The scheme will help the UK achieve its target of reducing greenhouse gas emissions by at least 80% by 2050, compared to 1990 levels. 

CRC started in April 2010 with the ‘footprint’ year, which will focus on initial registration and compliance. If your business is affected, you must register with the scheme by September 2010.

How does CRC work? 

The qualification criteria for full participation in the CRC scheme are:

  • Having at least one HH meter settled on the HH market in 2008
  • An annual electricity supply through all HH meters of at least 6GWh.

If you’re participating fully, you must monitor and report on your business’s CO2 emissions every year and buy allowances for all the CO2 emitted. The more CO2 you emit, the more allowances you have to buy. So there’s a strong incentive to make your business more energy efficient and reduce your environmental impact. 

The first sale of allowances will start in April 2011. To begin with, you can buy allowances to cover all your emissions, but from April 2013, the Government will introduce a ‘cap and trade’ scheme to limit the number of allowances available. See the Timescales and FAQs sections for more details on how this will work.

If your organisation had at least one HH meter in 2008 but uses less than 6GWh of electricity, you must register with the scheme but don’t need to participate fully.

What are the benefits of CRC? 

As your business becomes more energy efficient, you’ll save money by reducing your energy bills. You could save more than it costs to buy the CO2 allowances. Also, the government will publish an annual league table showing the comparative performance of all participants. It will then redistribute the money collected from selling allowances back to the participants, whose league table position will decide how much money they get back. A good league table position will boost your public image as well as earning your business extra revenue.

 For more information, please read the other pages in the CRC Explained section or ask your Account Manager. You can also find more details on CRC at the following websites: