Carbon Reduction Commitment

It is forecast that all companies will eventually be subject to a legislation that requires them to reduce their energy consumption. Currently large companies who use over 6,000MWH a year in their whole organisation (approx £500,000 in electricity bills) are required to register with the Environment Agency and trade carbon credits under the Carbon Reduction Commitment (CRC). This threshold is likely to become lower in the next few years.  The year you should be reporting against, the ‘qualifying year’ is 2008.

The CRC is essentially a method of trading carbon. All qualifying organisations are put into a league table and pay a fee dependent on energy consumption. After one year the money is redistributed back to the organisation according to how much energy they have saved; if they use less energy they will rise up the league table and therefore will be rewarded.