Due to start in April 2010, the CRC is a vital tool for cutting carbon emissions from large, non-energy intensive organisations. By 2020, it is expected to deliver annual reductions of at least 4.4 million tonnes of carbon dioxide (MtCO2) and save participants around £1 billion a year in reduced energy costs.
The CRC will require organisations that consumed more than 6,000MWh of electricity through half hourly meters in 2008 to participate in the scheme from April 2010 onwards. Around 5,000 public and private sector organisations will be included, ranging from retail, leisure and manufacturing companies through to local authorities, universities and NHS Trusts.
From April 2011 onwards they will have to buy and surrender carbon allowances to cover their annual emissions, with revenue from the sale of allowances being recycled back to participants based on their carbon cutting performance.
A Carbon Reduction Commitment League Table will rank organisations and those who are highly ranked will receive a bonus payment whilst poor performers will be penalised.
In its first year the league table will rely exclusively on "early action metrics" to determine the bonus/penalty amount organisations receive. Recent changes announced by Government have introduced greater flexibility in terms of gaining recognition for early action, but certification against the Carbon Trust Standard remains a key early action metric, alongside voluntary automatic metering.
The Government's changes to the CRC are designed to clarify the policy and address some of the main concerns of stakeholders, particularly businesses. Key changes include:
- Option for subsidiaries to participate separately from parent companies
- 2010/11 will be a reporting year only, so the April 2011 sale of allowances will be for 2011/12 only
- Greater flexibility has been introduced in terms of gaining recognition for early action, and the early action weighting will be reduced more gradually
- Information on onsite renewables generation will be published but it will not alter an organisation's position in the league table
To claim the Carbon Trust Standard as an early action benefit, organisations must hold a valid certificate at the end of the first year of the scheme (31st March 2011). This means that any organisation likely to be covered by the CRC should act now to prepare for registration, starting by assessing their carbon emissions.
Achieving the Carbon Trust Standard will not only reduce the cost of participation in the CRC but it also provides a clear demonstration of an organisation's commitment to measurable carbon reduction.
Based on a rigorous certification process the Carbon Trust Standard measures actual results. To achieve it, organisations must have measured, managed and reduced their carbon emissions over time.
This provides sceptical stakeholders with reassurance that an organisation's environmental claims are more than just "greenwashing" - important as 70% of consumers and nearly a third of businesses say they are more likely to buy from companies who are working to reduce their carbon emissions.
Since its launch in 2008, over 150 of the UK's most recognisable brands and organisations have already achieved the Standard. HSBC, Asda, B&Q, the London Fire Brigade and Marks & Spencer are just a few of the organisations to have marked themselves out as leaders, taking early action to tackle their environmental impact and listening to the needs of their stakeholders. In the process they have become more energy-efficient and saved hundreds of thousands of pounds.
Collectively, companies achieving the Standard have cut their annual emissions by 1.5 MtCO2 and made an average reduction per annum of 6%. This is ahead of the overall trajectory required to meet the UK's carbon reduction targets. The total footprint certified by the Carbon Trust Standard accounts for 3% of the UK's total carbon footprint from businesses and transport.