CRC Energy Efficiency Scheme Updates

           Carbon and Climate

As we approach the next CRC Energy Efficiency Scheme (CRC) reporting round, what important points do participants need to consider? Firstly, the CRC Registry has migrated to a new platform, and, therefore, it is important to check that you have a note of your new login and password. The Environment Agency (EA) will be able to help with any queries. Secondly, April is the window for the forecast sale of allowances that can be used against emissions for 2017/18 and 2018/19 (but not for 2016/17 compliance).  The forecast sale is optional because compliance can be met retrospectively in the buy-to-comply sale of each year. The price set for this April’s forecast sale is £16.60/tonne, with payment due in June this year. This compares to a price of £17.70/tonne next year in the buy-to -comply sale for 2017/18. Although the forecast sale is cheaper, payment has to be made 15 months earlier. To add to the dilemma, if a participant has to-date been purchasing in the buy-to-comply sale, a move to purchasing in the forecast sale this year would mean they face two payments in one year. The decision greatly depends on each company’s own circumstances.

When forecasting the level of emissions, it should be noted that the CRC emissions factors for 2017/18 have not yet been published. In 2014/15, the grid electricity emissions factor was 0.5331 kgCO2/kWh but has been lowered each year and is now at 0.446620kgCO2/kWh for 2016/17. This is because as the proportion of the UK energy mix that is met by low-carbon generation increases, the conversion factor is adjusted, which affects the levels of emissions being reported under the CRC. A new factor for 2017/18 is due to be published in June this year. The CRC will be abolished on 1st April 2019, at the end of the 2018/19 compliance year. CRC regulations were recently amended to provide for a final forecast sale in 2018 and a final compliance sale in 2019. Current indications are that no refunds will be given for excess allowances held at the end of the phase, except in the circumstances already set out in the scheme rules, and Participants should plan accordingly. An increase in CCL from April 2019 is designed to replace the income stream to the Treasury, but a replacement to the reporting element of CRC is yet to be announced.

Nikki Wilson

Nikki joined Alfa Energy in September 2015 as a Carbon Management Consultant where she advises clients on legislation, compliance, and the implementation of carbon management schemes. She is a Practitioner member of IEMA, has a postgraduate diploma in Environmental Decision Making, and has over 15 years’ experience in energy consultancy.