Global menu

Our global pages

Close

CRC Energy Efficiency Scheme (“CRC”) – Have you assessed whether you qualify for Phase 2?

    • Energy and infrastructure
    • Real estate sector
    • Retail
    • Technology, Media and Telecoms

    19-11-2013

    If you qualify for phase 2 register before 31 January 2014

    Those organisations that are participating in phase 1 will already be familiar with the CRC. However, other organisations may be new to the CRC, either because they did not exist in 2008 (the year when qualification for phase 1 was assessed), or because their electricity consumption in 2008 meant they did not qualify for phase 1.

    The CRC is the UK’s mandatory emissions trading scheme aimed at improving energy efficiency and cutting carbon dioxide emissions in large public and private sector organisations in the UK. Under the scheme participants have to monitor and report on their energy consumption and purchase and surrender sufficient allowances to cover the CO2 emissions associated with their energy consumption.

    The CRC is split into phases and we are currently approaching the end of phase 1. Phase 2 commences 1 April 2014 and runs until 31 March 2019.

    Irrespective of whether an organisation is participating in phase 1 of the CRC, it will need to consider whether it is required to participate in phase 2. Where an organisation is required to participate in phase 2 it must register with the Environment Agency by 31 January 2014.

    Qualification

    Other than for mandated participants an organisation (assessed on a group basis as at 31 March 2013) will qualify for and will be required to participate in phase 2 where from 1 April 2012 to 31 March 2013 it had:

    • at least one settled half hourly electricity meter; and
    • consumed 6,000 megawatt hours (“MWh”) or more of qualifying electricity supplied on the settled half hourly market.

    Some electricity consumption does not count as qualifying electricity for these purposes and is excluded from the CRC e.g. certain supplies to domestic accommodation and supplies to facilities subject to a climate change agreement.  

    Mandated participants are required to participate in Phase 2 regardless of their electricity consumption. All UK central government departments and devolved administrations along with certain other public bodies are mandated participants.

    Registration

    Organisations which are required to participate in phase 2 of the CRC should register through the Environment Agency’s online CRC Registry. The window for registration closes on 31 January 2014. Penalties may be imposed on organisations which fail to register when required including fines and publication of the organisation’s name.

    Organisational changes since 31 March 2013

    Qualification for phase 2 is based on an organisation’s group structure as at 31 March 2013. Where an organisation’s structure has changed between 31 March 2013 and registration additional information may need to be included in the registration and this may trigger registration obligations (e.g. where two organisations which are required to participate merge with each other the CRC Registry must be notified of this in the organisation’s registration).

    Actions

    An organisation (which is not a mandated participant) should:

    1. assess its group structure as at 31 March 2013. The CRC relies on Companies Act 2006 tests to determine whether entities are treated as forming the same CRC group. This means that an organisation may be required to participate in the CRC with other organisations which it does not have day-to-day contact with.

    Non-UK companies which own assets in the UK also need to assess whether their UK activities qualify for the CRC.

    2. calculate its group’s qualifying electricity supplies (i.e. total electricity supply through settled half hourly meters less any excluded supply):

    a) where its group’s qualifying electricity supply is 6,000 MWh or more the group is required to participate in phase 2 of the CRC and should register using the CRC Registry; or

    b) where the supply is less than 6,000 MWh the organisation does not qualify for the CRC. Organisations which are not required to participate should keep a record of how this has been assessed. This will be useful if the Environment Agency ever requires evidence to prove the organisation was not required to register. It will also be useful information should there be any organisational changes e.g. if the organisation is sold.

    3. consider whether there have been any changes to its structure since 31 March 2013 which either need to be reported to the CRC Registry or which trigger an obligation to register for phase 2 (e.g. where a non-participant purchases an organisation which is required to participate).

    In any event those participating in phase 1, which continues until 31 March 2014, should review their CRC obligations whenever there is a change to their structure since this may also trigger an obligation to register/notify the CRC Registry in relation to phase 1 of the CRC.

    For more information contact

    < Go back

    Print Friendly and PDF
    Subscribe to e-briefings