Carbon Reduction Commitment

The CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) is a compulsory scheme to improve energy efficiency and cut CO2 emissions in large public and private sector organisations, together responsible for producing around 10% of the UK’s CO2 emissions.

Implemented in April 2010, the scheme is designed to raise awareness of energy management amongst non energy intensive businesses. It includes the setting of a new carbon price (starting in 2012, participants will buy allowances from Government each year to cover their emissions in the previous year), an emissions reporting target and the ranking of participants in a performance league table, to encourage both competition and the chance for companies to improve their ‘energy reputation’.

Participating businesses will be required to monitor their emissions and purchase allowances for each tonne of CO2 they emit. There is therefore a direct incentive for companies to reduce their emissions and by increasing energy efficiency the scheme should also help businesses reduce their energy bills.

If the CRC scheme works as it is meant to, businesses involved will invest in energy efficiency and reduce their electricity and gas use, which should in term mean that energy production goes down.