The Carbon Reduction Commitment Overview 26th March 2009 Pete Clutton-Brock Policy Officer

CRC Summary Mandatory auction based cap and trade scheme Revenue neutral to the Exchequer Avoiding overlap As simple a scheme as possible

Organisational Structure Highest Parent Organisation -Companies Act Public sector -Distinct legal entity Principle Subsidiaries -can adjust baseline for changes

Qualification

Four key actions during the CRC year 1.Purchase allowances at auction 2.Monitor emissions and complete annual report 3.Surrender allowances equal to total emissions, buying / selling allowances as appropriate 4.Receive a recycling payment CRC Summary

What emissions does CRC cover? All Energy-Use emissions - not just half-hourly electricity Indirect - Electricity Direct – Gas, Oil, Coal etc Energy use assigned to the Counterparty to the energy supply contract Not Covered EU ETS or CCA emissions Transport, Households De-minimis

3 year fixed price introductory phase Allowance price = £12/tCO2 Buying allowances

Reporting  Once per Phase Monitor emissions from all energy use Submit Footprint Report  Annually Monitor CRC emissions (90% rule) Submit Annual Report on CRC emissions

Self Certification – no 3rd party verification Based on energy bills and invoices Supplier statements to reduce admin Risk based audit backed up by penalty regime Evidence Packs – to record energy use and provide audit trail Emissions Reporting via an online Registry Reporting

Performance League Table Participants will be ranked by how well they reduce emissions single league table for all participants Position in the league table will determine how much money you get back

Four key actions during the CRC year 1.Purchase allowances at auction 2.Monitor emissions and complete annual report 3.Surrender allowances equal to total emissions, buying / selling allowances as appropriate 4.Receive a recycling payment Recap

CRC timeline

What’s new? Change of footprint year: 1 April 2010 to 31 Mar 2011 Change of registration period: April 2010 to Sept 2010 First sale of allowances in April 2011 for both the preceding year and the following year. Use of Carbon Trust Standard in the early action metric.

What should I do now? Qualification Establish organisational structure Determine half-hourly electricity use for 2008 Sign up to the CRC mailing list Carbon Monitoring –Need to establish accurate systems to measure kWh and hence carbon –maintain source list inventory Early Action Metrics –AMR programme for Non-half-hourly metered electricity & gas –Carbon Trust Standard - if 2 years reduction history Forecasting –Emissions trajectory –Savings from planned projects

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