Skip to content

Green Business Network


Return to main news page

CRC scheme - Treasury pulls rewards for good performance

Costs for large companies could rise by millions

Release date: 22/10/2010

As part of this week’s spending review, the Treasury has changed the goalposts for those companies required to participate in the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. Participating organisations were originally going to receive money back rewards for a good performance within the CRC league tables, but this “reward” money is instead to go directly to the Treasury.

The government statement reads: "Revenues from allowance sales totalling £1 billion a year by 2014-15 will be used to support the public finances, including spending on the environment, rather than recycled to participants. Further decisions on allowance sales are a matter for the Budget process."

Under the CRC scheme, very high energy users* have to purchase carbon allowances upfront for the year ahead based on their own estimation of use at a rate of £12 per tonne. Those that use more will face financial penalties.

However, these charges have now been delayed by a year and will now start in 2012. According to the Treasury, the cost of the carbon allowances is likely to rise to £16 per tonne starting in the 2014 tax year.

The initial cost of CRC will rise dramatically for large private and public sector organisations, which means that the only way of offsetting these additional costs is to save money by implementing measures that actually reduce carbon dioxide emissions.

For many businesses, this may bring forward plans for investment in infrastructure and new greener technologies, but for others it could make the UK a less favourable option to site a business than other countries worldwide. Like many of the other changes, we’ll have to wait and see.

GBN can help businesses looking to reduce carbon and can also signpost organizations to other sources of support. If you are unsure of what the changes to the CRC scheme mean to your business or would like help to reduce your carbon emissions, please email us at

*Any organization who during 2008 had at least one half hourly meter (HHM), settled on the half hourly market and an annual electricity supply of 6000 Megawatt hours (MWh) or more must become a full participant in the CRC Scheme.

Any business that used between 3000 and 5999 Megawatt hours in the 2008 qualification year, must disclose its total annual supply of half hourly electricity during the period.

Organisations with half hourly meters that used less than 3000MWh in the 2008 qualification year, will need to provide contact details for its organisation and tick the appropriate box on the on-line form.

The Environment Agency is responsible for running the CRC Scheme. To find out more, visit their website at: and type in CRC.

Return to main news page