CRC: third early action metric scheme is accredited | Practical Law

CRC: third early action metric scheme is accredited | Practical Law

An update on the accreditation of a third scheme (the British Standards Institution's Kitemark scheme for Energy Reduction Verification) that can be used to certify emissions reductions for the purposes of the early action metric under the CRC Energy Efficiency Scheme (CRC).

CRC: third early action metric scheme is accredited

Practical Law UK Legal Update 3-502-8813 (Approx. 4 pages)

CRC: third early action metric scheme is accredited

by PLC Environment
Published on 27 Jul 2010 • UK
An update on the accreditation of a third scheme (the British Standards Institution's Kitemark scheme for Energy Reduction Verification) that can be used to certify emissions reductions for the purposes of the early action metric under the CRC Energy Efficiency Scheme (CRC).
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The British Standards Institution's (BSI's) Kitemark scheme for Energy Reduction Verification (ERV) has been recognised by the Environment Agency as an equivalent to the Carbon Trust Standard under the CRC Energy Efficiency Scheme (CRC) and so can be used by participants to score under the CRC's early action metric and improve their rankings in the league tables during the first phase of the CRC.

Terms used in this update

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

Background: CRC and the Early Action Metric

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.
The CRC involves, amongst other things, the sale of Allowances. There will be two sales of Allowances in the Introductory Phase. These will be Fixed Price Sales, with an unlimited number of Allowances sold by the Government at a fixed price of £12/tCO2. The first Fixed Price Sale will take place in April 2011. From Phase 2 onwards, Allowances will be sold through auctions, with a limited number of Allowances being sold with no minimum price.
The Government will recycle the revenue it makes from the Fixed Price Sales and auctions 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 its ranking in the League Table that will be calculated and published by the Administrator every October. The League Table will be published, and the first Revenue Recycling payment will be made, in October 2011.
The League Table will rank Participants based on three metrics:
  • The Early Action Metric (EAM).
  • The Absolute Metric.
  • The Growth Metric.
The weighting that is given to each metric will change over the first four Compliance Years of the CRC. 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:
  • The percentage of a Participant's total electricity and gas consumption (excluding electricity supplied through Settled Half Hourly Meters and gas that is supplied through Daily Meters), in respect of which they have chosen to install automatic metering (AMR) or which is Dynamic Supply. The cut-off date for this factor is 31 March 2011. Any increases in the amount of electricity or gas supplied through AMR after that date will not result in a higher score under the EAM.
  • 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 as equivalent to the CTS. This factor is assessed at the end of each Compliance Year to which the EAM applies (that is, on 31 March 2011, 31 March 2012 and 31 March 2013). If the percentage of a Participant's CRC Emissions that are covered by the CTS (or other recognised accreditation scheme) increases over this three-year period then the Participant's score under the EAM will improve each year.
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:

BSI's Kitemark Energy Reduction Verification scheme

On 16 July 2010, the Environment Agency (which the main CRC Administrator) recognised the British Standard Institution's (BSI's) Kitemark scheme for Energy Reduction Verification (ERV) as equivalent to the CTS and CEMARS (see BSI press release).
The Kitemark ERV scheme, which is based on the implementation of energy management system BS EN 16001, can be used to certify organisations that have reduced their carbon dioxide emissions by at least 2.5% per year through lower energy use. The certificate is calculated on the basis of three years worth of data and is valid for two years from the end of the relevant Compliance Year.
The Kitemark ERV scheme has been designed specifically for the purposes of the CRC and is therefore focused on greenhouse gas emissions from energy use (but organisations can choose to include emissions from transport and other sources not covered by the CRC).
Organisations that are certified under the Kitemark scheme 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 a dozen organisations are currently working towards accreditation under the scheme.

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