Facilities Management Association

The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme will require large public and private sector organisations like supermarkets, hotels, hospitals, local authorities and central government departments to improve the energy efficiency of their estate. According to the Government, financial savings should be significantly greater than any costs arising from participation.
 
The CRC aims to ensure that organisations play their full role in contributing to the UK’s emissions reductions of at least 34% on 1990 levels by 2020 through improved energy efficiency. The scheme is mandatory and will save participants around £1bn per year by 2020 through cost-effective energy efficiency measures that are not yet being taken up.
 
The scheme will target organisations whose annual half-hourly metered (HHM) electricity use is at least 6,000 Megawatt hours (MWh) – typically those that spend £500,000 a year on electricity, although all organisations that have a half-hourly meter will be required to participate in some way. By 2020 the scheme is expected to have delivered emissions savings of at least 4.4 Mt CO2 per year.

Explains Hayley Saunders, Solicitor at Shoosmiths:

“The scheme will operate on a cap and trade basis, so for the first three years the Government will have fixed trading allowances, which are currently set at £12 per term.

“Organisations that register for the scheme will need to buy those allowances, and the aim is to get organisations to reduce emissions rather than buy further allowances.”

She adds:

“The Environment Agency has responsibility to enforce the CRC and if an organisation fails to register, they may be liable to a fine of up to £5,000 plus £500 per day until they successfully register.”

Along with the CRC there is also predicted to be far more checking of Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs). It has been a requirement in England and Wales since 1 October 2008 to produce an EPC whenever a building is built, sold or rented out. DECs are also required for larger public buildings. An EPC provides the asset rating of a property, while a DEC provides the operational rating.

However it’s been argued that there has been a significant drop in the quality of EPCs, with assessment processes based on too many assumptions in the calculations.

The EU Commission has decided to simplify and clarify the current Directive, by strengthening certain requirements, redefining minimum thresholds for the implementation of the Directive, and making the role of national public sector and EU policies clearer. On 17 November 2009 a political agreement was achieved on this recast, the results of which will be implemented over the next two years. For more information: www.communities.gov.uk/publications/planningandbuilding/recastepbdconsultation or visit the Workplace Law website on www.workplacelaw.net