Terms that appear in capital letters in this update are defined in Practice note, CRC Energy Efficiency Scheme: PLC glossary and abbreviations.

The CRC Energy Efficiency Scheme (CRC) is a new UK-wide emissions trading scheme for companies and other organisations in the private and public sectors. The CRC came into operation on 1 April 2010. Phase 1 of the scheme (the Introductory Phase) runs from 1 April 2010 to 31 March 2013.

Participants will have to buy and surrender Allowances that equate to their CRC Emissions in each Annual Reporting Year of a Phase. The government will recycle the revenue it makes from the sales of Allowances back to Participants, to give them a financial incentive to reduce their energy consumption and, hence, their emissions. The amount of the Revenue Recycling payment that a Participant receives each year will depend on the proportion that its CRC Emissions have reduced as compared to the total CRC Emissions in the first year of the scheme (2010/2011). This is adjusted by a bonus or penalty payment based on its ranking in the League Table, which will be calculated and published by the Administrator every October.

The League Table will rank Participants based on three metrics, one of which is the Early Action Metric (EAM). The EAM will only apply in relation to the Introductory Phase (that is, to Compliance Years 2010/11, 2011/12 and 2012/13).

The EAM is designed to give Participants credit for actions they took prior to the introduction of the CRC to reduce their emissions (carbon footprint). The EAM is based on two equally weighted factors, which have been chosen as proxies for good energy management. One of these factors is the percentage of a Participant's CRC Emissions that are covered by either the Carbon Trust Standard (CTS) or another scheme that accredits energy efficiency and which has been recognised by the Environment Agency (EA) as equivalent to the CTS.

The Department of Energy and Climate Change (DECC) published the criteria by which equivalent accreditation schemes applying for recognition would be judged (see DECC Guidance on the Early Action Metric under the CRC Energy Efficiency Scheme: Carbon Trust Standard Equivalent Schemes).

For more information on:

On 6 August 2010, the EA recognised Carbon Saver Ltd's Carbon Saver Gold Standard as equivalent to the CTS (for more information, see the Carbon Saver Standard - Robust Independent Standards website).

Organisations that are certified under the Carbon Saver Gold Standard in each Compliance Year of the Introductory Phase will receive a score under the EAM, which will improve their rankings in the League Table in the relevant Compliance Year.

Around 24 organisations are currently working towards accreditation under this scheme.

On 5 October 2010, the EA recognised the Centre for Assessment Ltd's Carbon Action Standard Plus as equivalent to the CTS (see Centre for Assessment press release, Reducing Your Footprint, 18 March 2010).

Organisations that are certified under the Carbon Action Standard Plus in each Compliance Year of the Introductory Phase will receive a score under the EAM, which will improve their rankings in the League Table in the relevant Compliance Year.