To ensure compliance before July 31 st CRC Allowance Ordering, Purchasing and Surrendering process

Compliance 2012 Sale, Allocation and Surrender of Allowances  The CRC Energy Efficiency Scheme (Allocation of Allowances for Payment) Regulations 2012 are planned to come into force this year. Consequently, this guidance may be subject to change, depending on the final version of the legislation.  More details can be found on the environment agency website hereon the environment agency website here

Compliance The Principles  Participating organisations have to purchase allowances, initially sold by Government, for each tonne of CO2 they emit. The more CO2 an organisation emits, the more allowances it has to purchase.  The scheme has been designed to operate as a ‘cap and trade’ scheme. It is proposed that in subsequent phases :  There will be a cap on the total number of allowances available from Government.  Providing surplus allowances are available for sale, you will be able to purchase allowances in the secondary market.

Compliance Purchasing your allowances - summary The main steps you need to take are:  Appoint account representatives via the CRC Registry.  Obtain digital certificates and enrol in the CRC Registry.  Submit orders for allowances via the Registry during the sale window, (1 June to 31 July 2012)  Facilitate payment to DECC for allowance orders, (funds received no later than 31 July 2012)  Surrender allowances by 28 Sept 2012 equal to the quantity of CRC emissions for the energy supplies in your 2011/12 Annual Report.  Note: the following slides are screenshots from this document published by the Environment Agencythis document published by the Environment Agency

Compliance Ordering Allowances

Compliance Ordering Allowances

Compliance Ordering Allowances

Compliance Ordering Allowances

Compliance Ordering Allowances

Compliance Invoice? No – A Memorandum of Account  A Memorandum of Account (instead of an invoice) will be issued to the Account Representatives and Senior Officer for each allowance order submitted to the CRC Registry.  This document will be in a form that can be presented to your accounts payable department to facilitate payment.  Note: the allowance payment is a requirement under the Allocation Regulations. It is not a payment for either goods or services. This is the reason a Memorandum of Account will be issued rather than an invoice.

Compliance Memorandum of Account

Compliance Payment  Payments must be made into the DECC bank account specified in the Memorandum of Account.  The government sale of allowances is not subject to VAT.  All payments must be:  Accompanied by your unique Allowance Payment Reference (on the Memorandum of Account)  Made by electronic transfer (may take several days to clear) such as BACS or CHAPS or, with agreement, a credit or debit card.  From an account with a credit institution such as a bank or building society.  Note: If you have not ordered and paid for sufficient allowances by the end of July deadline you are likely to find that you do not have sufficient allowances to meet your surrender obligation.

Compliance Late payments  If you do not have sufficient allowances for surrender you could be at risk of enforcement action including civil penalties.  Any payments which clear into the receiving account after 31 July 2012 will be invalid and will be refunded by DECC as soon as reasonably practicable.

Compliance Surrender deadline  The 2012 surrender deadline is 31 July.  However, participants will be treated as compliant with their 2011/12 surrender obligation providing:  The Environment Agency receives a valid order for sufficient allowances including payment of cleared funds by 31 July 2012; and  Sufficient allowances are surrendered by 28 September –Note: the following slides are screenshots from this document published by the Environment Agencythis document published by the Environment Agency

Compliance How to Surrender Allowances

Compliance How to Surrender Allowances

Compliance How to Surrender Allowances

Compliance Secondary market  In the future, unused allowances may be sold or bought from other participants or third party traders. This is termed the secondary market.  Secondary market transactions will be subject to VAT.  The CRC Registry has a notice board facility which is designed to match buyers and sellers  Note: the following slides are screenshots from this document published by the Environment Agency this document published by the Environment Agency

Compliance How to Trade Allowances – Notice Board

Compliance For Info: Generic Compliance timeline

Compliance Validating reporting data before allowance purchases CRC is a self certification scheme. It is the responsibility of participants to validate their own reporting data prior to submission. Each participant is required to develop its own internal audits to ensure the data are reported in accordance with scheme requirements and that sufficient allowances are surrendered. For more information on CRC Internal Audits click hereCRC Internal Audits click here

Compliance All clear? Need any help?   Click here for more help

Compliance Allowance Purchase / Surrender Reassurance Service  Assurance programme – clear actions and milestones  Review of 2008 registration, 2010/2011 footprint and annual report  Overview of 2011/2012 annual report prior to allowance purchase  Guided walk-through of allowance ordering process  Guided walk-through of payment process  Guided walk-through of the allowance surrender process  Estimated time: 1 ¼ days Cost £995