The Carbon Reduction Commitments (CRC) Energy Efficiency Scheme is the UK’s new mandatory carbon reduction cap and trade scheme due to start in April 2010. It is central to the UK’s strategy for improving energy efficiency and reducing carbon dioxide emissions from buildings, as set out in the Climate Change Act 2008. The scheme has been designed to make organisations accountable for their energy use, to improve energy efficiency and to raise awareness, especially at boardroom level.

The CRC scheme works by placing a price on carbon emissions. In the introductory three-year phase from April 2010, this price will be fixed at £12 per tonne CO2 and participants will be able to purchase an unlimited number of carbon allowances via government sales. From 2013, carbon emissions will be capped and participants will bid for allowances in an annual government auction, with prices dictated by the market.

The CRC Energy Efficiency Scheme will directly affect at least 5,000 public and private sector organisations although many more may be affected indirectly. The highest parent organisation must take the lead role in private business, and Joint Ventures and PFI contractors will have to participate if they qualify and have no majority owner.

There are significant implications for affected organisations. Energy consumption measurement, monitoring and reporting will be new to many participants, requiring thorough preparation and careful management. A robust and auditable system is required. Other implications include reputation of participants as performance will be published in the form of a league table, resources both to administer and finance legal compliance and the division of landlord and tenant responsibility.

The first deadline date is 1st April 2010 when participating organisations must start measuring energy consumption and collating detailed evidence of their carbon impact. Registration for the scheme is mandatory for all organisations with at least one half hourly meter settled on the half hourly market, and will take place between April and September 2010.

Faithful+Gould helps chart an economically viable path between low carbon and reasonable cost. We have produced award-winning innovative sustainability solutions for many public and private sector clients and developed pioneering carbon and waste toolkits. Our multi-disciplinary cost management, asset management and carbon management capabilities combine to help our clients develop a clear and achievable carbon reduction strategy as part of their sustainability objectives.

For more information about the CRC Energy Efficiency Scheme and how Faithful+Gould can assist your business, contact Ellie Horwitch-Smith on ellie.horwitch-smith@fgould.com or telephone 0121 483 6417