Here's a sneak peek into the results from Ethical Corporation's research for the brand new, 2nd edition report 'The Carbon Reduction Energy Efficiency Scheme: How Companies Cut Carbon, Save Money and Meet Legal Compliance'. The report covers:
Insight into how the CRC was designed, such as…
The scheme has been designed so that, over the long term, the relatively high price of allowances will make it more cost-effective for all firms to invest in cleaner technologies, improved production processes and energy-efficiency strategies. In this respect, the cap-and-trade market structure provides an incentive for organisations to reduce their emissions.
Strategic approaches to trading, such as…
By identifying and separating out its emissions sources, a firm can plot a marginal abatement curve that enables the firm to develop the most cost-effective and efficient abatement strategy based on its existing emissions. Firms should only purchase CRC allowances if all the abatement opportunities have been exhausted. The market price of carbon would need to be lower than the cost of abatement or there would be no point in purchasing allowances.
Exemptions from the scheme, such as…
Subsidiaries of CRC organisations (or whole CRC organisations if no subsidiaries exist) are exempt if they can demonstrate that they have more than 25% of their relevant emissions covered by Climate Change Agreements.
Last-minute changes to the scheme, such as…
Principal subsidiaries have now been renamed to ‘Significant Group Undertakings’, and regulations have been made more flexible for this group. Subsidiaries that are large enough to qualify in their own right (over 6000MWh) may now opt to participate in the scheme separately from their organisation group. The caveat here is that organisations cannot opt to disaggregate a nominated SGU if this will bring their own energy consumption below the 6000MWh threshold.
Critiques of the scheme, such as…
The British Retail Consortium believes that the UK Government has failed to understand the business realities of franchising operations, arguing that franchisers have very little control over their franchisees’ energy management.
BT contests DECC’s decision to exclude renewable energy, requiring companies to report renewables at the average grid factor. Several other interviewees echoed BT’s concerns, yet most agreed why DECC seeks to avoid double counting of fuel credits.
A simple presentation of what is required by your company, and associated fines such as…
If your organisation is eligible for CRC, but has failed to register by the end of the registration period, you will have to pay a fixed fine of £5,000. Then, for each subsequent working day you fail to register, you will be fined an additional £500 per working day to a maximum of 80 working days, together with publication of non-compliance.
Expert opinions on the specifics of the scheme, such as…
The following quote by an Asda representative: “The problem with a league table is that it is open to abuse, in that companies that have taken no action to reduce their carbon outputs could take rapid action and be seen as progressive whereas those companies, such as Asda, that have a sensible plan to reduce carbon outputs could join the scheme and have an impossible challenge of further reducing carbon against those companies who have taken little action to date. For the measure to work effectively, credit must be given to work undertaken before CRCs came into effect.”
By the end of the week, you can download a free summary from www.ethicalcorp.com/crc.
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