Carbon Reduction Commitment (CRC)

From April 2010 there will be a new scheme setup aimed at helping tackle climate change by reducing carbon dioxide emissions produced from large UK Businesses. This scheme is to be known as the Carbon Reduction Commitment (CRC) and will be operated by Defra.

What is CRC?

The CRC is a compulsory scheme designed to save business energy in order to help reduce the amount of carbon dioxide being released into the atmosphere, which is affecting our climate. The CRC will offer UK companies the opportunity to receive financial return if they reduce their carbon footprint.

The CRC is vital in achieving the targets of reducing greenhouse gas emissions by 2050 by at least 80% from that of the 1990 benchmark figure.

Which companies will be affected?

The CRC will impact large companies in both the private and public sectors. Businesses that match the specific criteria (2008 electricity consumption) will be required to be involved in the CRC.

How does the CRC scheme work?

If your business is required to participate in the CRC then you will be obliged to monitor your carbon emissions and purchase 'allowances' from the Government. Each 'allowance' represents 1 tonne of CO2 emitted.

These allowances can be purchased in either a sealed bid auction (fixed price - introductory period only) or on the open market.

The more CO2 a company emits, the more 'allowances' they will need to purchase. This guarantees that there is a direct incentive for companies to reduce their emissions. What's more, by encouraging business energy to be used in a more efficient manner the scheme aims to help organisations lower their utilities bills significantly.

CRC Timeline:

2009 - Registration packs sent out to qualifying companies. Businesses to provide consumption details for 2008

2010 - CRC scheme begins with a 3 year introductory period. First Compliance year April 2010 - March 2011)

2011 - Second Compliance Year. First sale of allowances (fixed price) takes place in April

2012 - Third compliance year

2013 - First capped phase begins. Auctioning of carbon allowances starts

British Gas Business offer a range of products and services tailored to the business market, including fixed price business electricity contracts, boiler and central heating services, an online business insurance comparison service, and a connections and metering service for new energy supplies.

Customers can visit the webstie for further information.