1. The CRC Energy Efficiency Scheme (CRC) Challenge
Henry Garthwaite, Business Development Manager
Carbon Trust Standard
October 2009 1

2. Agenda Introduction CRC Policy Context Business opportunities
Practical next steps

3. Our mission is to accelerate the move to a low carbon economy
We cut carbon emissions now
By providing business and the public sector with expert advice, finance and accreditation
By stimulating demand for low carbon products and services
We cut future carbon emissions
By developing new low carbon technologies through project funding and management, investment and collaboration
By identifying market barriers and practical ways to overcome them 3

4. Agenda Introduction CRC Policy Context Business opportunities
Practical next steps

5. The Policy Challenge
UK has 80% absolute GHG reduction objective by 2050 (~3% pa)
All sectors of the economy must contribute
Energy intensive industry/utilities already focused and regulated:
CCAs
EU ETS
Large non-energy intensive industry (and public sector) less focused historically:
Energy a small part of the cost base
Distributed, building energy use
Difficult to get senior mgmt buy-in
Lack of awareness, transaction costs
4MtCO2 pa saving by 2020 from 5000 CRC organisations

6. Not covered by EU ETS, CCA
The Policy Challenge
Not covered by EU ETS, CCA
UK business and public sector emissions (2002)
Total 54 MtC

7. The CRC policy response
Coverage:
Direct emissions (fuel use)
Indirect emissions (electricity use) – key to efficiency in building stock
5000 largest organisations – beneath the EU ETS/CCA threshold
Requires senior engagement:
Senior mgmt engagement: organisational structure, strategy, approach
Financial impact: budgeting + emissions reduction planning
Reputation impact: PR/comms
Legal impact: audit + compliance, evidence pack, spot checks + penalties
Cost-efficient carbon savings:
Carbon trading means lowest cost savings are achieved
Guaranteed carbon savings outcome in 2nd ‘capped’ phase

8. What is the CRC?
Mandatory emissions trading scheme focusing on large non-energy intensive organisations
Minimum ½hrly metered electricity consumption of 6,000MWh in calendar year 2008; equivalent to >~£500k spend
~5,000 organisations, equating to emissions of ~50 MtCO2 not covered by the EU ETS and CCAs
Cover emissions starting from April 2010
Organisation based scheme, including direct and indirect emissions
Ultimate/nominated UK parent responsible for all subsidiaries’ emissions; including electricity and other direct fuel use
HMT revenue neutral design
Auction, with proceeds recycled to participants

9. Agenda Introduction CRC Policy Context Business opportunities
Practical next steps

10. Driving internal change:
Key opportunities
Driving internal change:
Senior mgmt engagement + resources
Budget for carbon reduction projects
Focus on ‘cost of carbon’
Financial and reputational rewards, from effective carbon management:
Absolute and relative emissions reduction
Early action
BUT: the biggest savings are from cutting emissions now – before the CRC: electricity cost ~ £150/tCO2

11. Good carbon management is key to seizing the CRC opportunity
Focus of CRC
Reduce direct emissions
Work with the supply chain to reduce theirs
Consider offsetting
Consistent, accurate measurement (carbon footprinting)
Illustrative
Project F
Project E
Key component: Construction of abatement cost curve
Project D
Project C
Project B
Project A

12. The Carbon Trust Standard - Recognition for real carbon reduction
Why
Stakeholder communication
Employees, Customers, Government
Motivation for future action
CRC “Early Action Metric” Benefit
Methodology
Independent, Transparent, Robust, Based on GHG Protocol
Criteria
Actual footprint reduction over 3 years (Absolute or relative)
Management infrastructure to enable continued reductions

13. Example certifications to date - 130+ certifications - 200+ customers

14. The Carbon Trust Standard is linked to initial CRC recycling payments
Achieving the Standard will:
Boost league table ranking
Increase cash back through recycling
Achieving certification now gets 2011 benefit
10,000 tCO2e footprint (~£1m-£1.5m energy bill)
£120k allowances p.a.
£120k 1st purchase
£24k at stake (2011)
10%
20%
30%
40%
* Or ‘equivalent’
N.B. Figures are based on draft legislation

15. Agenda Introduction CRC Policy Context Business opportunities
Practical next steps

16. Mobilise your team – across the organisation
Practical next steps
Issue
Next step
Timeline and Rules
Read DECC CRC User Guide
CRC footprint
Determine org structure, investigate property ownership / leases, determine emissions sources
Reduction + trading strategy
Construct ‘MACC’ graph + prioritise projects
Early action
Contact Carbon Trust Standard team, evaluate AMR
Budget
Engage finance team
Compliance + evidence pack
Engage legal and finance team
Reputation
Engage senior mgmt + PR
Mobilise your team – across the organisation