Changes in Legislation

On 7 October 2009, the Government Department of Energy and Climate Change ("DECC") published its response and policy decisions following the third and final CRC consultation of March-June 2009. The response has made a number of significant changes to the structure of the scheme, including:

1. Name:
   
   The scheme is officially known as the Carbon Reduction Commitment Energy Efficiency Scheme ("CRCEES" or "CRC"), to acknowledge the fact that the scheme is primarily intended to support efforts to increase energy efficiency.
    
2. Cash flow:
   
   The first sale of allowances in April 2011 will now only require participants to purchase allowances for the year ahead (April 2011 to March 2012) and no longer for the previous year as well, effectively halving the initial cost of CRC allowances. As a result, the first year of the Introductory Phase will become a monitoring period.
    
3. Principal Subsidiaries:
   
   Large subsidiaries that would qualify in their own right (electricity consumption in 2008 of 6,000MWh or more) can now choose to participate independently and not as part of their organisational group. To reflect these changes, Principal Subsidiaries are now referred to as Significant Group Undertakings.
    
4. Early Action Metric:
   
   Organisations which have demonstrated commitment to reducing their emissions either by achieving the Carbon Trust Standard, or accreditation from an equivalent scheme can use this to be counted towards the Early Action metric. The relative weighting of this metric in the overall performance score, compared to the Absolute reduction and Growth metrics, will be reduced more gradually to better recognise early action taken; this will be reflected in the performance league tables.
    
5. Treatment of renewable energy:
   
   The CRC will treat electricity generated from renewable energy sources which receives a Feed-in Tariff in the same way as electricity which is issued a Renewable Obligation Certificate, and has simplified the approach to reporting and accounting for renewably generated electricity. As an energy efficiency mechanism, CRC will not provide additional incentives for renewable generation. The Government will, however, publish alongside the performance league table, the organisations increase in onsite renewable generation together with energy efficiency savings. This will allow organisations to gain reputational credit for their investment in on-site renewables. For more information, go to our renewable energy page.
    
6. Public Sector Organisations:
   
   The definition of a public sector organisation has been simplified to create better clarity for participants in the CRC. Organisations designated as a "public authority" in the Freedom of Information Act 2000 and the Freedom of Information Act (Scotland) 2002 will participate in CRC on the basis of their individual FOI/FOI (S) listing, unless they are legally part of another body, in which case they would participate as part of that parent body.
    

Publication of the updated CRC Order will be laid before Parliament (and made available to the public) before the end of 2009.