The Move from CRC to SECR

           Carbon and Climate

The Environment Agency (EA) has confirmed that the 2018/19 year is now officially the final compliance year of the CRC Energy Efficiency Scheme. While this has been known for some time, the legislation order to enact the change only came into force in October.

It should be noted that existing CRC obligation still apply, and Participants are required to maintain accounts on the registry until 31st March 2022. The Evidence Pack must also be kept in place until 31st March 2025, when the CRC completely closes. The EA has advised that compliance audits can continue up to that date.

After the closure of the CRC, some undertakings will be required to report energy consumption and energy efficiency actions as part of their annual director’s report, under the new Streamlined Energy & Carbon Reporting (SECR). The Statutory Instrument for this new reporting has now been approved by Parliament and comes into force on 1 April 2019.

It should be noted that the above criteria are different to the qualification for the Energy Savings Opportunity Scheme (ESOS). Companies will need to confirm whether they have to comply with both the SECR and ESOS.

The SECR applies to large companies, under the following definition:

Where two or more of the following apply to a company:

  • More than 250 employees
  • Annual turnover greater than £36m
  • Annual balance sheet total greater than £18m

Under SECR, companies will be required to report scope 1 and 2 emissions. This means that electricity, gas, and transport will be included as a minimum. An intensity metric must also be included (as an example, this could be shown as tonnes CO2e per m2 floor area), together with a narrative to describe high-level overview of energy efficiency measures. Companies that are already covered by their parent company’s reporting are not expected to have to report separately.

It is predicted that SECR will cover approximately 11,300 companies compared to just 4,000 that currently have to comply with the CRC. A total of 1,200 companies listed on the stock exchange already comply with the existing Mandatory GHG Reporting. The new SECR puts similar requirements in place for other large companies. The government has advised that it will publish SECR guidance in January 2019, by building on the current guidance on Mandatory GHG Reporting.

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.