The UK government has introduced a Carbon Reduction Commitment (CRC), Phase 1 of which is to run from April 2010 until March 2013. The scheme will extend the need to monitor emissions of carbon dioxide to any UK based public or private organisation that has consumed more than 6,000 megawatt-hours (MWh) of metered electricity across their business during 2008. Dependent on tariffs, this is roughly equivalent to an annual bill of between £0.5 and £1.0 million.
According to government estimates, organisations to be covered by the scheme are responsible for about 10% of the UK's carbon dioxide emissions and will include offices, data management centres, hospitals, department stores and supermarket chains, etc.
The scheme is mandatory and institutions will be required to buy carbon allowances to cover expected annual total carbon dioxide emissions. They will also need to calculate CO2 emissions (but excluding those associated with transport) by measuring and recording the (Scope 2) energy they consume. The purchase of allowances will be conducted via auction, additional or excess allowances can bought or sold through a secondary market and at the end of each year, allowances for all emissions must be submitted. League tables ranking participants by energy efficiency and their success in reducing energy consumption will be prepared and published. This will determine how much of the original cost of the allowances is returned to participants.
Details of the scheme are presented on the Department of Energy and Climate Change (DECC) website. As yet, there has been limited press coverage, but it seems likely reaction in the UK will be spirited once details become more widely known. Although forming part of a government road-map, this will need further explaining to a populace that has started to express concerns about costs likely to be incurred in moving the UK towards a lower carbon economy. It is also not clear, how the scheme would work in later years as gains in energy efficiency become increasingly more difficult for organisations to achieve.