Registrations for CRC off to a slow start

Only 16% of organisations expected to be caught by the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme have registered with 90 days left before the deadline.

Just 3,280 organisations out of a potential 20,000 have so far registered under the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, according to data published by the Environment Agency on 21 June.1

The registration period opened on 1 April and closes on 30 September. But two months in, only 447 out of an expected 5,000 full participants in the scheme (9%) have registered.

Participants are organisations that have at least one half-hourly meter and use more than 6,000 megawatt-hours of electricity per year.

Out of the expected 15,000 organisations with lower emissions that will have to report but not participate fully, 2,833 have registered – a rather more creditable 19%. These organisations have at least one half-hourly electricity meter but fall under the consumption threshold.

Manufacturers have been among the first to register because they could be eligible for an exemption from the CRC if they already have an agreement to cut emissions under the climate change levy.

Full CRC participants that fail to register by the deadline face a £5,000 fine plus a daily £500 fine until they comply. Those required to make an information disclosure but fail to do so face a £500 fine for each half-hourly meter they have.

Overall, just 16% of organisations expected to be caught by the CRC have registered with 90 days left before the deadline. Moreover, it is surprising that a higher proportion of organisations with less exposure to the CRC have registered.

Andrew Hitchings, who leads the agency’s implementation of the CRC, said he was not surprised or worried, because registration periods for new regulatory regimes are inevitably ‘back-end loaded’ towards the deadline.

He said the reason for the difference between registration rates is that registering an information disclosure is a simple 30-minute task that organisations could do and then forget about, whereas registering as a participant takes longer and requires payment of a fee. Organisations prefer to wait for potential teething troubles with the agency’s registration system to be sorted out, and to hold onto their money for longer.

Mr Hitchings said the number of enquiries to the agency’s CRC helpdesk showed organisations were preparing to register. The helpdesk receives about 350 calls and a similar number of emails per week.

The most common queries are from organisations wanting help with online registration. Others do not know what the standard industrial classification code is for their business activity.

Some organisations are unsure of how to account for energy supplies for joint ventures and projects funded by the private finance initiative. Others are asking whether they should count subsidiaries that went into liquidation during the CRC’s 2008 qualification period.

Another query is how to establish an emissions trading account. The CRC’s emissions trading phase starts in April 2013, so the agency will produce guidance later this year.

One area of confusion is over the benefit participants can claim for automatic meter readers (AMRs). In the scheme’s first year of 2010/11, performance will be determined solely by ‘early action’ on managing and reducing emissions through fitting AMRs and achieving the Carbon Trust Standard or equivalent.

Participants will only gain credit for supplies received through AMRs for the period in 2010/11 when the meter was fitted, not for the full year as some had supposed. This may make a difference to the benefits of early action.

The issue came to light before the election (ENDS Report 423, p 47), but the agency’s publication of a specific guidance note was delayed, because of ‘purdah’ on official announcements.2

Many registrants have misunderstood the rules that exclude certain types of electricity use, such as for transport and domestic accommodation, from the CRC. For instance, on transport, some organisations are excluding road vehicle diesel. But this does not need to be excluded because it was never regulated under the CRC in the first place.

Another common problem is that some registrants are entering their energy usage in kilowatt hours, not megawatt hours as required, leading to a 1,000-fold error.

And some companies are disclosing the name of a technical manager as the person responsible for the CRC, instead of a director.

Mr Hitchings said some registrants have raised more fundamental policy, rather than practical, issues. He said the agency is in discussion with the private equity sector and their legal advisers over the CRC’s treatment of private equity firms as parent companies and the firms in their investment portfolios as subsidiaries. This has proved unpopular within the sector (ENDS special report March 2010, pp 6-12).

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