CRC key information

The Carbon Reduction Commitment (CRC) scheme started on 1 April 2010 and will run indefinitely. The introductory phase runs for three years and each subsequent phase incorporates five compliance years, with no gaps or breaks.

In the introductory phase allowances are sold at a fixed price of £12/tCO₂(tonnes of carbon dioxide) and there is no limit on the number of allowances an organisation can purchase. In all subsequent phases there will be a cap on the total number of emissions available to the whole group of CRC participants. These allowances will be auctioned, rather than sold at a fixed price.

Before the start of each phase there is:

a qualification period in which organisations must find out whether they meet the qualification criteria or whether they must make an information disclosure to the administrator;
a registration period in which organisations must register as a participant or disclose relevant information;
a footprint year in which participants must calculate their emissions responsibility under CRC (except in the introductory phase when the footprint year is the same as the first compliance year).

In each compliance year, participants must complete four steps:

At the beginning and during each compliance year, purchase allowances based on expected energy use, taking into account energy efficiency efforts planned for that year (except in the first year of the scheme, when participants will be able to purchase allowances at the end of the year).
Monitor energy use during each scheme year and by the end of July, following the end of the scheme year, report CRC emissions to the administrator.
By the end of July, surrender allowances equal to emissions during that year.

The Regulators will conduct a rolling audit covering up to 20 per cent of participants each year to check that organisations have self-certified correctly. For this purpose, participants must keep records to support the information they report.

Why is the CRC important for your organisation?

The Carbon Reduction Commitment scheme will be broadly revenue neutral and will offer a number of incentives to reduce emissions. The purchase of allowances creates a cost for each tonne of CO₂ emitted and the scheme recycles revenue raised from the sale of allowances back to participants, depending on how well they perform in reducing emissions. Comparative performance in the annual league table provides a strong incentive to protect and improve corporate reputation.

Scheme administration and regulation

The Carbon Reduction Commitment (CRC) has been developed by the UK Government and the devolved administrations. References made to ‘Government’ in these CRC pages mean the UK Government and the devolved administrations.

Certain aspects of the scheme will be administered by the Environment Agency, which also acts as the regulator for England and Wales. The other regulators are the Scottish Environment Protection Agency and the Northern Ireland Environment Agency.