CRC Update
The first UK CRC Energy Efficiency Scheme (CRC) league table is
due to be published in April 2011. How will your business stack
up?
The scheme is designed to encourage large organisations to
reduce their greenhouse gas emissions. The scheme requires all
organisations that consume more than 6,000 megawatt hours of
electricity each year to declare their energy use and from 2012 buy
allowances equivalent to their emissions.
The scheme has recently made headlines after the Government
announced in its recent spending review that revenues from
allowance sales will no longer be recycled to participants who are
successfully implementing energy efficiency schemes, but kept by
the treasury. It is estimated the change will cost
organisations £3.5bn by 2015.
Furthermore, in April 2011 the first league table of all the
companies registered to the scheme will be published. This will
allow competitors, consumers, partners and the media to see how an
organisation is performing in reducing its carbon dioxide
emissions.
The league table ranks participants on the basis of performance
in three metrics:
This is the percentage of emissions reduction for the
organisation compared to the previous year. It is based on a
rolling average of the past five years. Once the absolute metrics
have been calculated for each participant, they are then
ranked.
This considers the percentage reduction in other carbon
emissions per unit of turnover, which aims to recognise the growth
of companies. As with the absolute emissions in the first metric,
this metric will operate on a rolling five-year comparison.
The final metric considers the early action initiatives made by
the organisation to reduce their carbon emissions, but only in the
first year of the scheme. This metric recognises actions such as
installing automated meters and accreditation to the Carbon Trust
Standard, or an approved equivalent.
The early action metric will be the sole indicator of
performance for organisations, but the weightings change
dramatically in the second and third years.
This means that, while the early action metric is important for
the first year of the scheme, organisations serious about
committing to the scheme and lowering emissions long-term should be
focusing on the absolute metric, which has the greatest overall
weighting for organisations' position on the league table and is
based on continual improvement. This will need a much more
systematic approach than the quick-fixes encouraged by the early
action metric. To perform well organisations have to continually
improve over time and this is where adopting the plan-do-check-act
approach used in management systems can offer great benefits.
For those organisations participating in the CRC, adopting a
management systems approach like that of BS EN 16001 or ISO 14001
will help companies achieve continual improvements in energy usage
and may offer the best way to reduce carbon emissions on a
continuing basis. This in turn could help them to climb the
rankings of the CRC league and soften the likely increase in
financial penalties.