Energy efficiency remains focus of CRC

The Government is unlikely to curb other greenhouse gas emissions as the Carbon Reduction Commitment (CRC) legislation evolves - and will stick to just tackling energy efficiency for now.

Speaking at the Sustainable Business Round Table Debate on the CRC, Niall Mackenzie, head of carbon markets at the Department of Energy and Climate Change (DECC), confirmed there are no plans to extend the CRC to other gases.

But he added that if there is a good case made to support the idea, DECC would always consider it. “Never say never,” he said. “But I am struggling to understand any rationale as to why the abatement of other gases would be incentivised by inclusion in the CRC. But we are always open to ideas.”

The event, sponsored by Parsons Brinckerhoff and EDF Energy, enabled energy managers from a select group of UK businesses, like the Co-op and Hilton Hotels, to get a sneak peak at how the Government’s finalised CRC regulations might look.

Mackenzie told attendees that the Government had taken on board industry concerns about the scheme and was putting the finishing touches to the completed version of it.

The CRC will track the energy use of large organisations and benchmark them against one another, publishing a league table ranking them on cuts they have achieved.

Mackenzie said DECC would be addressing the problem of how to rank organisations that were already well along the road towards carbon neutrality against those who had not done anything to curb their energy use.

As things stand, he acknowledged there was a “cliff edge” whereby the past efforts received recognition in the first year of the scheme, but were then all but ignored. The revised regulations will, in all probability, soften the transition by giving more recognition to earlier achievements in the second year of the scheme too.

Large branding-conscious companies will also be allowed to split up their operations, providing each part is still over the CRC threshold and all parts of the company are still covered.

The example Mackenzie gave was a retail giant that had several different high street chains in its portfolio. It might, he said, wish to report each chain separately, and would be allowed to do so providing its HQ operations were covered by one of these divisions.

Once the company had settled on divisions, it would not be able to reshuffle them to nurse figures during any phase of the CRC.

The other prickly issue is renewable energy – with many of those organisations which have invested heavily in renewables as part of their carbon reduction package disappointed that the scheme does not recognise this, as it only charts energy used, rather than its source.

Mackenzie said DECC was aware of the concerns, but that this was an energy efficiency scheme rather than a way of promoting renewables, and that those companies would be rewarded by other government initiatives for their support of clean energy.

He did not rule out a concession, saying it was possible that there may be a subsidiary league table that ranked organisations on their use of on-site renewables.

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie