CRC is new legislation that is due to come into force in April 2010 as a part of the Climate Change Bill. Under this legislation it will become mandatory for all businesses in the UK with annual electricity usage over 6,000MWh to join a cap and trade scheme and report their emissions to the government. At today's prices, this is roughly equivalent to total electricity bills of approximately £500,000 per year.
The aim of the Carbon Reduction Commitment is to reduce the level of carbon emissions currently produced by the larger 'low energy-intensive' organisations by approximately 1.2 million tonnes of CO2 per year by 2020. As a Climate Change Bill commitment, the scheme is aiming for a 60% reduction in CO2 emissions by 2050.
The Carbon Reduction Commitment will cover both public and private sector organisations. At present, the carbon reduction scheme is expected to affect approximately 5,000 organisations in the UK. In doing so, it is anticipated that the scheme will affect 25% of total business sector emissions within the UK.
While the scheme doesn't officially start until April 2010, many organisations will need to make preparations before that date to ensure that they comply with all legal requirements and fully participate in the scheme.