The Environment Agency published the first Performance League Table under the Carbon Reduction Commitment (Energy Efficiency) Scheme (‘CRC’) earlier this month. One of the ideas behind the CRC is that organisations will be motivated to improve their energy efficiency (and therefore their carbon emissions) not only because they will reduce their energy costs but also because they will want to be well placed in the CRC performance league table. The league table is said to rank the energy efficiencies of each of the participants. It is debatable whether it reveals anything really significant this year, although it is possible that it may do so over time.
The Environment Agency (EA) run the CRC and compiles the league table. This year the rankings are based only on two specific early actions that each participant could have taken to improve their energy efficiencies. The first is the installation of automatic metering and the second is how much each participant’s emissions are covered by the Carbon Trust Standard (which certifies organisations that achieve reductions in carbon emissions and commit to reduce them further in future) or another equivalent and EA approved carbon reduction scheme.
Critics would say that these are very simplistic measures and would not take into account any other energy efficiency measures which had already been put into place. They also point to the fact that those who took their actions too early get no credit for them in this league table. Organisations generating electricity from renewable sources for their own use whilst potentially very ‘green’ don’t count in the league table rankings (and are dealt with in a complex way for CRC reporting and buying allowances).
The league table gets a bit more interesting next year when, in addition to the metering and carbon reduction scheme standards, the ranking in the league table will be affected by:
- the participants’ percentage change in their CRC emissions when compared to the first CRC year’s emissions; and
- the percentage change in annual CRC emissions per unit of turnover (or revenue) which will recognise organisations that are growing sustainably.
The Government has said that it may revise the reputational element of the CRC when it sees how it operates in the first few years. A number of organisations have been critical of the league tables. The British Retail Consortium has called for them to be scrapped. Many others are critical. They certainly serve far less purpose now that there is no repayment to participants based on their position in the table.
There are some interesting facts and figures in the table though. We noticed that :
- The Ministry of Defence were the biggest emitters of CRC measured CO2 (1,754,541 tonnes) and if their emissions remain the same for year 2 of the CRC their bill for allowances will be just over £21 million (at the likely fixed price of £12 per tonne)
- The Charity Commission emitted 382 CRC tonnes of CO2 and would, if nothing changes, spend £4,584 on allowances
The first time the obligation to buy allowances to cover CO2 emissions will apply is 2012. When costs have to be budgeted and paid for we expect companies will be more motivated than before to take steps to reduce costs, even if these are long term plans that don’t immediately show up as a higher position in the CRC league table.