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Until recently, most of the environmental work undertaken by businesses in the UK has been largely voluntary.

However, the law is fast catching up and new mandatory targets are shortly to be introduced.

One such government initiative goes under the name of the "Carbon Reduction Commitment" (CRC) which, as its name implies, requires organisations that are heavy energy users to make ongoing commitments to reduce their contribution to greenhouse gas emissions.

Although the CRC is scheduled to come into force in two years time, it will use 2008 as a benchmark, so it's never too soon to start thinking about it.

On a slightly different note, we've added a new section to the newsletter, covering our training courses - all of which can be customised for the specific needs of your organisation.

We also offer some of our training in the form of scheduled public courses, which are featured in this issue. Please take a few moments to review what is available to develop the competency of your staff.

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Over the past few months we've received many questions from our clients regarding the Carbon Reduction Commitment – What it is and how it might affect them.

We thought it would be useful to provide a general overview of what the Carbon Reduction Commitment (or CRC as we'll now refer to it) is all about and what it hopes to achieve by way of energy efficiency improvements.

WHY IS THE CRC REQUIRED?

To quote the government stance on CO2 emissions - as stated in the Climate Change Bill.

• By 2020, the UK Government is committed to delivering CO2 emissions reductions of at least 26% against 1990 levels.
  
  
• Longer term, the goal is to cut CO2 emissions by at least 60% by 2050.

A number of measures are needed to encourage (and in some cases mandate) businesses to reduce their greenhouse gas emissions. The Carbon Reduction Commitment is one of the key measures. Other examples that are relevant to business include:

• Climate Change Agreements
• Climate Change Levy
• Other Emissions Trading Schemes for energy intensive businesses
• Carbon Trust
• Investment in development of low carbon technologies

Many of the most energy intensive industries in the UK are already implementing energy efficiency improvement plans by participating in existing schemes such as the EU Emissions Trading Scheme and Climate Change Agreements.

Many UK organisations, such as banks, local authorities, retailers and hotel chains, have high overall energy consumption even though they are not inherently intensive energy users. High consumption is because of the large number or size of the sites from which they operate.

Government data shows that this latter category accounts for around 10% (and rising) of the UK's CO2 emissions. A Carbon Trust analysis indicates significant scope for cost-effective carbon reductions within these organisations. The Carbon Reduction Commitment (CRC) is the method proposed by the UK Government to enforce such reductions.

WHAT IS CRC AND WHO WILL BE AFFECTED?

The CRC is a mandatory Greenhouse Gas Emissions Trading Scheme that covers large businesses and public sector organisations (such as banks, government departments, retailers, hotel chains and local authorities) whose half-hourly metered electricity usage is greater than 6,000 mega watt hours (MWh).

As a guide – if an organisation's electricity bill is greater than £500,000 a year, it will probably be covered by CRC. There are, however, a number of circumstances where it will not apply (e.g. energy use associated with the EU Emissions Trading Scheme and a Climate Change Agreement).

To establish whether or not a business falls within scope of CRC, electricity usage should be calculated at the highest parent organisation level, including all subsidiaries of the organisation.

WHAT WILL NEED TO BE REPORTED?

Organisations falling within the scope of CRC will be required to report on an annual basis all their UK CO2 emissions from fixed-point energy sources, including:

• Electricity
• Gas
• Other fuel types such as LPG

WHAT ABOUT ‘GREEN ENERGY’ USERS?

If companies buy 'green' energy or carbon offsets, does this mean that they will not fall under CRC even if their electricity usage is above 6,000 MWh?

Afraid not! The whole concept of CRC is to promote energy efficiency improvements. The focus is therefore on how much electricity you use and how you can improve efficiency over time, rather than the source of your electricity and what you do to offset your emissions.

WHEN DOES CRC COME INTO FORCE?

The scheme will come into force in January 2010. However, the 6,000MWh threshold will be applied against 2008 as the base year.

HOW WILL THE CRC WORK IN PRACTICE?

The system will work on a 'cap and trade' basis whereby the Government will set a 'cap' on the quantity of emissions allowed by participating organisations through carbon allowances. The 'cap' will decrease over time, so that companies must become progressively more energy efficient to remain within the cap.

There will be an initial 3-year phase during which carbon allowances will be sold at a fixed price of £12 per tonne of CO2. Thereafter, allowances will be purchased through an auction process.

As a further incentive to improve efficiency and reduce emissions, the revenue raised will be recycled to participating organisations in proportion to their 2009 emissions, but adjusted by a bonus or penalty related to their emissions performance.

I MAY FALL UNDER CRC – WHAT SHOULD I BE DOING RIGHT NOW?

If you think you might fall under CRC, at parent company level, you should be gathering data on your electricity consumption (and subsequently on CO2 emissions) across your organisation, including subsidiaries. This will indicate if you are above the 6,000MWh threshold. Monitoring and reporting should continue going forward.

In addition to consumption and emissions data, you should consider implementing an energy efficiency improvement strategy in preparation for the CRC coming into effect in January 2010. This is good business and environmental practice in any case, since the financial rewards from reducing energy consumption can be substantial.

For further advice and guidance on the Carbon Reduction Commitment or Energy Efficiency improvements in general, as well as our comprehensive portfolio of Environmental Services please contact:

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We provide a range of Training opportunities, with a firm emphasis on developing Competence in those who attend.

View our Current Course Listing, with full overviews.

We also offer public courses that are run in the North and South of the country and currently include:

• Introduction to Risk Assessment
• Corporate Manslaughter Briefing
• Display Screen Equipment Assessor
• IOSH Managing Safely
• IOSH Working Safely

See Dates and Venues for these Courses

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In the most significant case of its kind for the Environment Agency, prison sentences were handed down in June to two people who had operated a highly organised illegal waste disposal operation.

The two defendants pleaded guilty at Inner London Crown Court to the charge of "conspiring to unlawfully deposit controlled waste on land". One of the defendants was sentenced to 22 months in prison, with the other receiving a 14-month sentence.

The case highlights a number of 'firsts' for the Environment Agency including:

• The first 'conspiracy' charge it has taken to court – which allowed the Environment Agency to secure a stronger conviction



• The first use of a European Arrest Warrant to bring back a defendant from abroad to face charges

The prosecutions were the result of a 3-year investigation by the Environment Agency, which found that between January 2003 and June 2004, both men masterminded an elaborate operation In London and Essex. More than 14,600 tonnes of waste were illegally dumped on at least 15 different sites.

To cover their tracks, the defendants created legitimate-appearing businesses and set up a bank account under an assumed name through which they laundered the money. Several sites were masqueraded as construction sites, with earth moving equipment to compact the waste and increase capacity.

Following the successful prosecution Paul Leinster, Chief Executive of the Environment Agency, said:

"This case is the culmination of one of the most intensive investigations carried out by the Environment Agency into the illegal disposal of construction and demolition waste. It sends out a clear message...that the Environment Agency is watching and will take every step possible to protect the Environment".

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Environmental legal changes that are in the pipeline and are likely to affect UK organisations include:

Batteries Directive

This will affect manufacturers, importers, distributors, users and recyclers of batteries and accumulators.

The objectives are to reduce the use of harmful elements (e.g. cadmium) in manufacture and make it easier to recycle batteries instead of disposing in landfill.

Expected to come into force by September 2008

Carbon Reduction Commitment

This affects heavy users of energy (see main article).

Whilst introduction is not scheduled to start until 2010, the year that will be used to benchmark future energy usage is 2008.

Controls on the Handling, Transfer and Transport of Waste

The Duty of Care regulations, which are scheduled to come into force in 2009 will simplify existing regulations and make them more effective. The aim is to improve the management of waste, help protect the environment and crack down on illegal practices.

Groundwater Regulations

Existing regulations need to be enhanced to increase protection of groundwater from pollution originating with contaminated land.

These regulations, which are scheduled to come into force in November 2008, could affect anyone whose activities might result in contamination passing from land to groundwater, (e.g. spreading agricultural waste, disposing of agrochemicals or disposing of waste from mining activities.)

View more anticipated legal changes. Then decide if they affect you and what changes you need to make by way of preparation.

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