Collection

CRC Energy Efficiency Scheme

The CRC Scheme aims to incentivise energy efficiency and cut emissions in large energy users in the UK's public and private sectors.

From:: Department for Energy Security and Net Zero, Environment Agency and Department for Business, Energy & Industrial Strategy
Published: 15 July 2015
Last updated: 12 October 2017 — See all updates

Overview

The information on this page is for participants in the CRC Energy Efficiency Scheme (formerly known as the “Carbon Reduction Commitment”), which will be closed following the 2018 to 2019 compliance year. The scheme applies to large energy users in the public and private sectors across the UK, including supermarkets, water companies, banks, local authorities and all central government departments. Organisations that meet the qualification criteria are required to participate, and must buy allowances for every tonne of carbon they emit.

In the Budget on 16 March 2016, the Chancellor of the Exchequer announced that the government has decided to close the CRC scheme following the 2018-19 compliance year. Doing this will significantly streamline the business energy tax landscape by replacing it, in a revenue neutral way, with an increase in the Climate Change Levy.

Organisations will report under the CRC for the last time by the end of July 2019 and surrender allowances for emissions from energy supplied in the 2018-19 compliance year by the end of October 2019.

Further information can be found in the Government’s response to the consultation: Reforming the Business Energy Efficiency Tax Landscape.

Qualification

A summary of steps to determine whether your organisation qualifies for participation in the CRC and more information on qualification are to be found on the Environment Agency CRC webpages.

Compliance requirements

Organisations which participate within the CRC are required to monitor their energy use, and report their energy supplies annually. The Environment Agency’s reporting system applies emissions factors to calculate participants’ carbon dioxide (CO2) emissions on the basis of this information.

Participants must purchase and surrender allowances for their emissions. Allowances can either be bought at annual fixed-price sales, or traded on the secondary market. One allowance must be surrendered for each tonne of CO2 emitted.

CRC Energy Efficiency Scheme Order: table of conversion factors

In the current phase, participants have the option of buying allowances in advance in the lower price ‘forecast sale’ at the start of a compliance year, or in a higher price ‘compliance sale’ after the end of the year.

For the current phase, the following prices have been announced:

CRC Scheme Year	Forecast Sale Price	Compliance Sale Price
2014/15	£15.60	£16.40
2015/16	£15.60	£16.90
2016/17	£16.10	£17.20
2017/18	£16.60	£17.70
2018/19	£17.20	£18.30

DECC (via its payment provider SSCL) wrote to CRC Energy Efficiency Scheme participants who purchased allowances in the April 2015 forecast sale to notify them that they will be entitled to a refund of 50 pence per allowance purchased in that sale. This was due to an administrative error. The table above was amended to reflect the correct forecast sale price for 2015/16 (£15.60). Only those participants who purchased allowances in the April 2015 forecast sale received details of next steps from SSCL. Further information about the refund and next steps was provided in the Q&A Document.

Further information about the refund and next steps can be found in the Q&A Document.

More information on reporting and allowance sales is available on the Environment Agency CRC webpages.

Further guidance

Official guidance on all aspects of complying with the CRC Scheme is available from the Environment Agency web pages.