The CRC Energy Efficiency Scheme ('CRC' or 'Scheme') is a mandatory emissions trading scheme applicable to private and public sector organisations in the UK that consume more than 6,000MWh of qualifying electricity through settled half-hourly meters. Participants have to report annually on total energy consumption and carbon emissions (1 April – 31 March); compile evidence to support their reporting (which can be subject to an audit by the Environment Agency); and purchase allowances to cover their carbon emissions.

Phase 2 Reporting

The first year of the second phase of the CRC, now referred to as the Initial Phase, has just closed. Participants should be busy collating energy data sets to report on in the CRC Annual Report, which must be submitted by the end of July 2015, and preparing their Evidence Packs.

In preparation for the Initial Phase reporting, participants should have:

  1. Confidence in the entity that has been registered as a participant (which may require legal advice);
  2. Sufficient data management processes in place – energy supply data must be collected from 1 April 2014; 
  3. Participants should ensure they are satisfied with their reporting and will be ready for potential scrutiny by the Scheme Regulator in the event that they are called for statutory audit;
  4. As well as being confident in the data reported, participants have to prepare Evidence Packs which must include records of appropriate internal sign-off; and
  5. Implemented an energy strategy to facilitate monitoring of CRC emissions. Through understanding energy use, participants can help reduce their costs of Scheme compliance including planning for potential purchase of allowances in the forecast allowance sale held every April.

The CRC Internal Audit 

CRC participants can expect to be audited by the Environment Agency at least once in each CRC phase. To ensure readiness for the audit, participants would benefit from:

  • a review of the design and implementation of processes and key controls over the appropriate application of CRC guidance for reporting in the Scheme; and 
  • undertaking pre-reporting audit procedures over CRC reports.

The CRC guidance states that participants must undertake an internal audit of their records at least once a year. Whilst there is no prescribed format for the Evidence Pack, it should include an audit certificate signed by the CRC Senior Officer. As participants are collating their data for CRC reports, having confidence in their reporting processes will ensure that all CRC audits run smoothly. Remember that the Environment Agency can issue civil penalties to organisations which do not comply with the CRC Regulations, including failure to maintain an Evidence Pack. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.