Stephensons Solicitors LLP Publishes Basic Guide to Carbon Reduction Commitment (CRC)
Manchester, Greater Manchester (PRWEB UK) 20 July 2013 -- Stephensons Solicitors LLP, a prominent UK law firm, has published a basic guide to the Carbon Reduction Commitment (CRC), a government scheme to reduce the UK’s total carbon emissions and promote energy saving.
The scheme is a central part of the government’s strategy to meet ambitious carbon reduction targets, of at least a 26% reduction in CO2.
Companies which consume electricity at a rate of at least 6,000 MWh (6,000,000 kWh/"units") per year or equivalent to 1,500 private residences or a total of £500,000 in electricity expenses, are affected by the CRC, so it is important for larger organisations to be aware of the scheme.
According to government estimates, more than 20,000 public and private sector companies will be obliged to report their CO2 emission for monitoring, but only 5,000 will be required to participate fully in the CRC scheme.
If a company qualifies for the scheme they will register with the Environment Agency and then monitor their electricity and energy use excluding transportation. Next, using a government provided formula, they will convert this energy usage into CO2 emissions. This will be the company’s allocation. They will then have to purchase sufficient CO2 allowances from the government each CRC year, and self certify their energy use to the government.
When a company exceeds its CO2 allocation it must purchase allowances from companies who have performed well and created a surplus. This is a great incentive to reduce emissions.
There is no specific outline or directive for reducing CO2 emissions, so companies can decide upon their own preferred methods. Publicly available league tables created by the government provide the opportunity for businesses to enhance their reputation through good performance. Obviously, a low league table position would have the opposite effect on reputation.
Qualifying companies need to purchase anticipated allowances in advance of each upcoming CRC year. There is no longer a fixed price per energy unit, since total emission levels have been capped in order to gradually reduce the collective output. Unit prices will be determined via auction with additional bonuses and penalties based on performance.
The CRC scheme has the potential to impact upon a company’s budget and in order to enforce the scheme the government will conduct audits for around 20% of qualifying companies every year. Companies who do not comply with the scheme could be fined in addition to the cost of purchasing their allowance.
Lianne Tracey, Stephensons Solicitors LLP, http://www.stephensons.co.uk/, +44 1942 774225, [email protected]
Share this article