Under the carbon reduction commitment, local authorities will be held legally and financially responsible for state funded schools within their geographical area. As such, the CRC aims to increase energy management practice between local authorities and the schools that fall under their umbrella.

EU Emissions Trading Scheme

To the first year of the carbon reduction commitment, organisations should carry out a number of actions to make best use of the scheme.

The organisation should forecast its business as usual emissions.
Cost-effective abatement options should be identified and implemented at the first opportunity. During the first few years of the carbon reduction commitment, the fixed price of £12 per tonne of CO2 provides a simple costing of opportunities.
Organisations should also monitor all included sources of emissions, to identify the potential future opportunities and risks.

Having identified their total annual CO2 emissions, participating organisations will have to purchase carbon allowances at a fixed price of £12 per tonne during the first two years. The initial two-year introductory phase of the CRC will run from the beginning of April 2010 to the end of March 2013. However, allowances will not be sold until the end of the second year. If a participant does not purchase enough allowances during April, it can purchase additional allowances through the secondary market and safety valve, which will have a minimum price of £14 per tonne.

Annual reporting for the Carbon Reduction Scheme will fall in line with the financial year compliance cycle, from April to March, as opposed to the original reporting that was based on calendar year reports from Januaury to December.

Organisation within the Carbon Reduction Commitment will be required to maintain an evidence pack, and a source list of all emissions included in the CRC.

Additional rules will apply to the reporting on the generation of renewable energy, exporting power from your own energy generation and the use of combined heat and power.

The carbon reduction commitment originally aimed to use a bonus and penalty scheme as part of the incentive for organisations to reduce their levels of emissions. Any bonus for penalty administered to an organisation will be based on their position in the league tables.

However, following the Government's Spending Review on 20th October 2010, the bonus and penalty scheme appears likely to be dissolved, with all revenue from allowances being kept by the Treasury.

The carbon reduction commitment emissions trading scheme will target of emissions that are not currently included in the European Union's emissions trading scheme all climate change agreements. It is anticipated that the trading scheme will affect approximately 5000 of the UK's largest organisations.

News Update - Important Changes to the CRC! - 20/10/2010