The Carbon Reduction Commitment (recently renamed the CRC Energy Efficiency Scheme) has now officially started.  This is the UK's first mandatory carbon trading scheme.  My understanding of the scheme is that it is split into three phases. 

The current Phase 1 is compulsory for organisations which consumed over 6,000 MWh (6,000,000 kWh) of half-hourly metered electricity during the period from January 2008 to December 2008. The supply must be or have been HHD - half hourly metered - so we are talking fairly big stuff for now - almost certainly companies spending in excess of £250,000 a year just on electricity so if you don't spend that much don't worry - just yet!

The main purpose of the CRC is to reduce carbon emissions from larger 'low energy-intensive' organisations by approx. 1.2M tonnes of CO2 per year by 2020. As a Climate Change Bill commitment, the CRC is aiming for a 60% reduction in CO2 emissions by 2050 - ambitious stuff!

The CRC covers both the public and private sectors and within Phase 1 as I have called it is expected to affect ~5,000 organisations in the UK responsible for roughly 25% of total business sector emissions.

The CRC will work in tandem with the existing EU ETS (Emissions Trading Scheme) and CCA's (Climate Change Agreements).  As a result, where emissions have been captured by the EU ETS and CCA, these emissions will not be captured by the CRC.  In essence, the CRC is targeted at the low energy-intensive users which these other schemes missed.

And what of those companies who do have half hourly metering but consume less than 6,000MWh?  At the moment all you need to do is make a formal disclosure to explain that their electricity consumption is below the threshold and therefore they do not have to participate in the scheme at present.  Watch this space for news of the next Phases and what it may mean for your business.