Climate change and the Carbon Reduction Commitment Energy Efficiency Scheme - A commercial reality

The Carbon Reduction Commitment Energy Efficiency Scheme (CRC), which enters into force in April 2010, will introduce a new emissions trading scheme for a wide range of non-energy intensive private and public sector organisations based upon the amount of energy used. A key element of the Government's strategy for controlling carbon dioxide (CO₂) emissions and dealing with climate change, the CRC will be a vital tool in the Government's armoury as it attempts to achieve an 80% reduction in greenhouse gas emissions by 2050 as well as meeting other legally binding targets set by the Climate Change Act 2008.

Lawyers

The CRC will apply to all organisations apart from those that fall within the scope of the EU Emissions Trading Scheme, although emissions covered by Climate Change Agreements and transport emissions will also be exempt. The CRC, once it has entered onto the statute books, will require organisations with a large energy demand and Government bodies to purchase CO₂) allowances to cover their anticipated energy requirements. Organisations, in turn, will surrender allowances based upon actual energy use and emissions, purchasing additional allowances in the event that there is a shortfall – effectively a "cap and trade" based scheme. Unlike the EU Emissions Trading Scheme and Climate Change Agreements, however, the CRC will apply to persons and organisations, not installations and processes.