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The Carbon Reduction Commitment Energy Efficiency Scheme (CRC-EES) is a new mandatory scheme aiming to improve energy efficiency and reduce the amount of carbon dioxide (CO₂) emitted in the UK.

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It is likely to affect around 20,000 organisations in some way, with around 5,000 large organisations across the private and public sector required to participate fully.

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Organisations that qualify to participate under the scheme are required to monitor their emissions and buy allowances from the Government for every tonne of CO₂ they emit. The more you emit, the more allowances you will need to buy.

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If you can answer yes to all three of the following questions, it is likely that you are required to participate:

• Are you the highest parent organisation or primary member?
• Did your organisation's total consumption between January and December 2008 exceed 6000MWh?
• Do you have at least one half-hourly read meter (HHM) settled on the HH market?

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If you have at least one HHM settled on the HH market but your organisation's usage between January and December 2008 was less than 6000MWh you will not be required to participate fully but will need to make an information disclosure via the online CRC-EES registry.

If your organisation's usage between January and December 2008 was more than 6000 MWh but you do not have any HHMs settled on the HH market, then you will not be required to participate fully or to make any form of disclosure.

Organisations that use a large majority of their electricity for transport, as well as those that have a significant proportion of their emissions covered by Climate Change Agreements (CCAs) may also be exempt from the scheme.

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To view the key dates of the scheme, click on the timeline below:

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If you do not qualify as a participant but are required to make an information disclosure, you will require the following:

• A list of all HHMs settled on the HH market
• Details of total electricity consumed through all HHMs including any AMR meters.
• If you qualify as a participant, you will be required to submit the following information in order to register:
• Information on your organisation and its principal subsidiaries
• Details of the individual(s) responsible for CRC-EES in your organisation
• A list of all HHMs settled on the HH market
• Total HH electricity used

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During the introductory phase of the scheme allowances will be sold at the fixed price of £12/tonne CO₂. From April 2013, the price of allowances will no longer be fixed, and will be dependent on auction.

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Calculate all energy usage for your organisation from electricity, gas and other fuels such as coal, diesel and LPG.

You should include all HHMs, all NHH meters with profile 05-08 but need only include NHH with profile 03-04 if all other energy sources equate to less than 90% of the overall carbon footprint.

Each energy type will have a different emission factor – for the purposes of CRC-EES these factors are determined using a 5 year rolling average – and these should be used to calculate the CO₂ total emissions from all sources.

Consumption associated with transport and/or CCAs may need to be removed from your equation and once this is complete, this should give you your relevant emissions, which you need to multiply by the allowance cost of £12/tonne CO₂ to calculate your exposure.

Go to our Carbon Calculator for a quick and easy estimate of your carbon footprint.

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The CRC-EES includes a number of penalties and offences for non-compliance, falsification and obstruction. These include:

• One-off fine of £1,000 for any organisation that does not meet the qualifying threshold but has at least 1 HHM and fails to make an information disclosure.
• £5,000 fine for any qualifying organisation who fails to register by the deadline – with a subsequent £500 fine per working day thereafter.
• Fine of £40/tonne CO₂ that is incorrectly reported after the 5% tolerance.
• Imprisonment for up to 3 years for knowingly or recklessly making false or misleading statements.

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While the information above provides a helpful starting point for understanding CRC-EES, the scheme is complex and the implications far reaching for participating organisations.

We can offer you fully serviced assistance with your CRC-EES obligations, from simply establishing whether you meet the qualification criteria to overseeing your online submissions for registration and undertaking ongoing compliance and reporting requirements.