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The UK Carbon Reduction Commitment

2degrees Sustainability Essentials

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The 2degrees Sustainability Essentials Series provides the necessary guidance to a range of topics,

for sustainability professionals looking for an easy-to-use guide, companies at the start of their 

sustainability journeys, or for 2degrees members who are new in their roles. Think of it as a short 

course to sustainability issues. This document highlights what you need to know about the UK’s

Carbon Reduction Commitment Energy Efficiency Scheme.

Contents

What is the Carbon Reduction Commitment?.................................................................................... 2 

Who is part of the CRC? ............................................................................................................................. 2 

Footprint & Annual Report ........................................................................................................................ 3 

Performance League Table .......................................................................................................................... . 

Absolute Emissions .................................................................................................................................... . 

Growth ............................................................................................................................................................ . 

Early Action Metric ..................................................................................................................................... . 

Changes to the Scheme ................................................................................................................................ . 

Managing the CRC……………………………………………………………………………………………………………... 

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Resources and further reading…………………………………………………………………………………………… 

What is the Carbon Reduction Commitment?

The Carbon Reduction Commitment Energy Efficiency Scheme (usually abbreviated CRC), is a mandatory

carbon emissions reporting and pricing scheme to cover all organizations using more than 6,000MWh per

year of electricity (equivalent to an annual electricity bill of about £500,000). The CRC came into force in

April 2010 and aims to significantly reduce UK carbon emissions not covered by other pieces of legislation. The primary focus is to reduce emissions in non-energy intensive sectors in the UK. The official

CRC website can be found here. 

The CRC consists of three parts:

Emissions Reporting – participants have to measure and reporting their carbon emissions

annually

Carbon Allowance Purchasing – participants have to purchase carbon allowances from the

government to cover their emissions from previous years. Reducing energy use and carbon

emissions therefore reduce their liability – for 2011 the price of allowances is £12 / tonne of CO2.

Performance League Table – participants will be ranked in a publically available league table

comparing their carbon reductions with other participants. This creates another carbon reduction

driver due to the reputational aspects of the comparisons.

The scheme is administered by the Environment Agency in England, Scotland Wales and Northern Ireland.

A useful glossary of terms to refer to throughout this document can be found here. 

Who is part of the CRC?

From the Environment Agency website, an organization must register as a participant in the CRC if:

It has one or more half-hourly electricity meters settled on the half-hourly market

And, it used at least 6,000MWh (Mega Watt hours) of half-hourly electricity during the

qualification year

This applies to all companies, partnerships, public bodies, charities and other incorporated bodies that

have operations in the UK. The qualification year for the introductory phase of CRC is the 2008 calendar

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year. However, if have a sufficient amount of emissions covered by a Climate Change Agreement (CCA)

you can claim exemption, or if you participate in the EU ETS.

If you are a subsidiary of an organization, or part of a group, the group must act as one entity. Your

highest parent organization will normally be the ‘primary member’ who must carry out administrative

actions on behalf of the group. Other organizations within the group should provide information about

their energy use to the primary member. If the highest parent organization is based outside the UK, your

group must nominate a UK subsidiary to represent the whole organization. Registration is done through

the Environment Agency – see this webinar for a walk-through guide to the registration webplatform:Environment Agency CRC webcast - Registration as a CRC participant 

Where a landlord and tenant arrangement exists, regardless of who owns the property, who occupies the

property or ultimately who uses the energy. In all situations, the responsibility to report under the CRC will

lie with whichever organization has a direct contract with the energy supplier. This arrangement exists for

both the half hourly electricity consumption liability and preliminary reporting, as well as the CRC's

requirement for annual compliance. More detailed discussion of the relationship between landlords &

tenants in the CRC can be found in the webinar Landlord and

tenant engagement in the CRC. 

Full participation details can be found on the UK Department of 

Energy and Climate Change (DECC) website 

Footprint & Annual Report

Organizations participating in the scheme must first of all calculate

their CO2 emissions - this is based on energy use over the

‘footprint year’. Participants in the scheme then have to produce a

‘footprint report’ identifying their total CRC emissions. The first

footprint report had to be submitted by the end of July 2011 for

the 2010 calendar year.

Footprint emissions are worked out by adding up all energy

supplied from electricity, gas, coal, liquefied petroleum gas (LPG),

diesel etc using energy bills, meter readings or fuel delivery invoices. Energy used for transport or

domestic accommodation is not included. At least 90% of total footprint emissions must be regulated

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