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CRC: Environment Agency publishes second Performance League Table
Practical Law UK Legal Update 9-524-7313 (Approx. 5 pages)
CRC: Environment Agency publishes second Performance League Table
by PLC Environment
| Published on 04 Mar 2013 • UK |
The Environment Agency published the Performance League Table for the year 2011/12 under the CRC Energy Efficiency Scheme, on 26 February 2013. This is intended to be the last CRC Performance League Table.
Speedread
On 26 February 2013, the Environment Agency published the Performance League Table (PLT) for the 2011-12 compliance year under the CRC Energy Efficiency Scheme (CRC). This the second, and last, PLT under the CRC, as the government confirmed in 2012 that it will abolish the PLTs.
The PLT is designed to:
- Show whether CRC participants have increased their energy efficiency.
- Provide CRC participants with a reputational driver for reducing their carbon dioxide emissions.
This year's best performer, out of around 2,000 CRC participants, is construction company BAM. Last year's best performer, Manchester United, has come in 488th place this year. However, BAM and a number of commentators have criticised the figures in the PLT as misleading.
Background: CRC Energy Efficiency Scheme
The CRC Energy Efficiency Scheme (CRC) is a mandatory emissions trading scheme for large businesses and public sector organisations in the UK. The scheme came into operation on 1 April 2010. Participants have to measure and report on their energy consumption and buy allowances for the amount of carbon dioxide emissions associated with their energy consumption. There are significant financial penalties for failing to comply with the scheme. The scheme is set out in the CRC Energy Efficiency Scheme Order 2010 (SI 2010/768), as amended by the CRC Energy Efficiency Scheme (Amendment) Order 2011 (SI 2011/234).
The Environment Agency (EA) is required to publish a Performance League Table (PLT) at the end of each CRC compliance year, ranking participants based on how energy efficient they are. The PLT is intended to provide a reputational driver for organisations in the private and public sectors to become more energy efficient.
Participants' rankings in the PLT are based on three metrics:
- Early Action Metric (EAM), which represents the percentage of a participant's energy consumption in respect of which they have chosen on a voluntary basis to install automatic metering before the CRC started and on CRC emissions covered by the Carbon Trust Standard (CTS) or an equivalent to the CTS.
- Absolute Metric, which represents how a participant's emissions have changed over the last year.
- Growth Metric, which presents a participant's change in emissions per unit turnover or revenue expenditure.
Rankings in the first PLT, for the 2010/11 compliance year, were based solely on the EAM. Rankings in the second PLT, for the 2011/12 compliance year, are based on 40% EAM, 45% Absolute Metric and 15% Growth Metric.
The private and public sectors are ranked together. There are no sector-specific tables.
The first PLT, for the year 2010/11, was published by the EA in November 2011 (Legal update. CRC: Environment Agency publishes first Performance League Table). However, the government has announced, as part of its plans to simplify the CRC, that it will be scrapping the PLTs going forward. The PLT for the year 2011/12 is therefore meant to be last one. Going forwards, CRC participants will still have to report on their energy consumption and emissions to the EA, despite there no longer being a PLT.
For more information on:
- The government's announcement to scrap the PLT and its other proposals to simplify the CRC, see Practice note, CRC Energy Efficiency Scheme: what changes have been made to the scheme since it was launched?: Response to March 2012 consultation.
- The CRC in general, see CRC Survival Kit.
Performance League Table for 2011/12
The EA published the 2011/12 PLT on 26 February 2013. This is the second, and last, PLT under the CRC.
The top 10 organisations for 2011/12 (out of around 2,000 participants in total) are as follows:
- BAM Group UK.
- Skanska Construction Holdings UK.
- Motorola Solutions UK.
- Manchester City Council.
- Bradford and Bingley.
- NHS Blood and Transplant.
- Carillion.
- Department for Communities and Local Government.
- United Business Media.
- Kirklees Council.
Last year's best performer, Manchester United, has come in 488th place this year.
According to the Department of Energy and Climate Change (DECC), the rankings show a 7-8% overall reduction in CRC emissions when compared to the PLT for 2010/11.
Comment
Some commentators have argued that the PLT has provided the reputational driver that the government envisaged when the CRC was first launched, as reflected by the overall decrease in emissions in this year's PLT. Others feel that it is difficult to tell from the PLT how much of the decrease in emissions is due to energy efficiency improvements, and how much is due to other factors such as the economic downturn or changes in a participant's organisational structures (for example, selling sites and buildings) (see Updated: Manchester United crash down the CRC league table, BusinessGreen, 26 February 2013).
Even this year's best performer, construction company BAM, (which according to the PLT has reduced its emissions by 65%) has criticised the PLT as misleading:
"We're doing really good things to cut our emissions, so we're happy to have some recognition for that. But the figures are misleading because there is no organisation that could cut its emissions by 65 per cent in one year unless they drastically changed their business - i.e. got rid of most of it."
When the government confirmed, in its response to the consultation on how to simplify the scheme, that the PLTs will be abolished, it gave very little explanation for its decision:
"The proposal to retain a reputational driver for the scheme, but to remove the detailed rules on the nature of the reputational driver and the metrics used from the legislation and place them in guidance, was supported by the majority of respondents (79%). However, a number raised concerns that the Performance League Table was not fit for purpose in its current format, saying that it did not accurately reflect performance due to its reliance on the early action metric in the first year, and that the way in which it was presented was not effective in engaging the media, investors and participants. Government is aware of participants’ concerns around the league table and, as such, has decided not to publish a league table ranking participants on the basis of the energy efficiency savings from 2013. Instead, the Environment Agency will publish participants’ aggregated energy use and emissions data."
(See paragraphs 136-137, DECC: Consultation on simplifying the CRC Energy Efficiency Scheme Government Response (December 2012).)
Going forwards, the EA will be required to publish participants' aggregated energy use and emissions data. However, it is still early to tell how much value this type of raw data will have and whether the different industry sectors will produce their own comparisons based on that data.