Carbon Zone

Carbon Reduction Commitment CRC
Administrator The Environment Agency (EA), Scottish Environment Protection Agency (SEPA) and the Department of the Environment in Northern Ireland are appointed as the joint scheme Administrators (referred to as the Chief Inspector in Northern Ireland). Basic administrative functions will be carried out by the EA for the whole of the UK and certain functions must be performed by them, such as operating the registry and maintaining accounts. Scheme regulation will be carried out by the relevant body in each part of the UK and include such functions as carrying out audits on participants and taking enforcement action against any participant in their jurisdiction (in the case of organisational groups this will be determined by the location of the Primary Member).
Allowance An allowance is purchased from Government and represents the right to emit one tCO2 by a participant. These can also be bought and sold by traders.
Annual report The report that each participant must provide via the online registry system by the last working day in July each year, detailing their emissions for the previous financial year.
reporting year
In the first phase of the CRC, an annual reporting year applies to every year of the phase. For second and subsequent phases of the scheme, it applies to the second year and all subsequent years of a particular phase only.
Automatic Meter
Reading (AMR)
Automatic Meter Reading (AMR) meters have been developed for gas and electricity that is not subject to HHMs so that consumers can access data on supplies. These meters provide consumers with access to their energy supply data. There is a wide range of AMR equipment available, however, CRC will only capture AMR meters which can be read remotely. A meter will be defined as an AMR meter for gas or electric, under CRC if it meets the following six criteria: For electricity, the meter is capable of capturing supply data on at least a half hourly basis For gas, the meter (together with an ancillary device), is capable of capturing supply data on at least an hourly basis The meter is the main fiscal meter and not a sub-metering device The meter has been read remotely The supply data is made available to the customer, and These meters are not settled on the half-hourly market.
Capped phase A capped phase is a phase in CRC which is subject to a limit on the total number of allowances made available to participants each year. The introductory phase is not a capped phase but all subsequent phases will be capped phases.
The CRC Energy
Scheme (CRC)
A mandatory emissions trading scheme for non energy-intensive organisations in the public and private sector.
Carbon Trust
The Carbon Trust Standard certifies that an organisation has genuinely reduced its carbon footprint and is committed to making further reductions year-on-year. Assessment against the Standard is undertaken by independent third-party assessors, based on the evidence provided by the participating organisation. To achieve certification against the Standard an organisation must meet the requirements in all three areas by: measuring its key greenhouse gas emissions, showing good carbon management performance and being able to show emissions reduction over the last year – either on a total emissions basis, or on a relative basis (e.g. emissions/£m turnover).
Climate Change
Climate Change Agreements relate to the Climate Change Levy (CCL), which was put in place to encourage users to improve energy efficiency and reduce greenhouse gas emissions. Climate Change Agreements (CCAs) allow energy intensive business users to receive a discount from the CCL in return for meeting energy efficiency or carbon saving targets.
Combined Heat
and Power (CHP)
A technology where electricity is generated at or near the place where it is used, with the heat produced being used for space heating, water heating or industrial steam loads. This potentially leads to much higher efficiency than conventional generation.
Each participant will have a compliance account through which functions such as registration, reporting and allowance purchasing and trading will be carried out via the registry.
Compliance year Each phase is made up of a number of compliance years. Each compliance year runs over the same period as a financial year. A participant must meet certain requirements for each compliance year, such as reporting or surrendering allowances. There are seven compliance years for each of the capped phases. The Introductory Phase lasts for three compliance years. The Qualification year is not a compliance year.
Core Sources Core sources are those that you are obliged to include in CRC if they are not covered by a CCA or the EU ETS. They include:
Core electricity supplies:
■ all settled HHMs
■ all non-settled HHMs
■ all non-domestic meters, and
■ all dynamic supply
Core gas supplies:
■ all daily meters
■ all half hourly meters, and
■ all large gas point meters
Any ancillary devices that are used in conjunction with a meter that allows a meter to be read will count towards core gas supplies.
CRC emissions These are the emissions of each participant for which it must purchase allowances each year.
Large scale organisational change featuring the sale of participants or Significant Group Undertakings. Government will transfer the responsibility for participating in the scheme to the purchasing organisation.
Dynamic Supply Dynamic supply is now characterised by the existence of (i) a set of equipment fixed to land that performs a common function (for example, street lighting), (ii) one element of the set of equipment is metered (for example a lamp post) and (iii) the existing meter point is used as a benchmark to determine the overall supply to the entire set of equipment in a given period.
Energy Efficiency
An accreditation formerly offered by the Carbon Trust for organisations that make energy supply savings through improved management and energy efficiency measures. This scheme has now been replaced by the Carbon Trust Standard.
EU Emissions
Trading System
The EU ETS is a greenhouse gas emissions trading system covering the energy intensive sectors of the EU Member States. Sectors covered by the system include: power generation, cement, glass, ceramics, steel, aluminium, and pulp and paper, which are termed ‘trading sectors’.
Evidence pack Participants in CRC must keep a record of their organisation’s energy supplies and other documents supporting the information given to the Administrators part of CRC compliance with the need for adequate records.
Footprint year The footprint year is the first year of each phase during which participants must monitor energy supply across their organisation and establish the sources of energy supply to be included in CRC for the forthcoming phase.
Footprint report The footprint report will contain information about organisational energy supplies and the sources to be included in the scheme for that phase. It must be submitted via the CRC registry by the last working day of July, after the end of the footprint year.
Grid average
Grid electricity is generated from a range of fuel sources which produce different amounts of emissions per unit of electricity generated. Grid average is the average emissions per unit of all electricity supplied by the grid. Currently this grid average emissions factor is 0.541/kWh, which is fixed for the Introductory Phase.
Half hourly light
These meters were introduced in April 2009 and are designed to be an alternative to traditional half hourly settled meters, as they are able to provide half hourly data at a lower cost. The data recorded by half hourly light meters can be used for settlement purposes. In CRC, these meters are therefore counted as half hourly meters settled on the half hourly market. As they were only introduced in 2009, they will not be relevant for determining qualification for the introductory phase.
Half hourly
This is the half hourly electricity market used by suppliers and generators to calculate the balance or imbalance, in what is generated and supplied, using electricity supplies information that is recorded half hourly.
Highest parent
The highest parent is the body with ultimate control over an organisational group. It is not a subsidiary of any undertaking in the group. Subsidiaries undertakings of the highest parent will be grouped together to form the CRC participant.
Organisations that have a settled half hourly meter but do not meet the qualification threshold for participation in CRC will have to disclose information on the HHMs they have and their electricity supplies, to the administrator via the online registry.
The introductory phase is the first phase of the CRC scheme. It begins in April 2010 and lasts for three years.
Large point gas
A large gas point meter is a meter which during a footprint year of a phase measured greater than 73,200 kWh of gas supplied.
League table A published table detailing the relative performance of all participants in CRC against the three weighted metrics: absolute metric, early action metric and growth metric.
Mandatory Half
Hourly Meter
Mandatory Half Hourly Meters (HHM) supply electricity settled on the half hourly market and are required in situations where the average peak electricity demand over the three months of highest supplies received exceeds 100kW over the previous 12 months. Note; not all half hourly meters trading on the half hourly market are classed as mandatory.
Megawatt hour
A unit of energy equal to 1 million watt hours or 1 million joules per second supplied for a period of one hour.
A non-domestic meter means a meter which is designed to measure supplies to non-domestic premises and is capable of measuring maximum electricity demand.
Participant An organisation that qualifies or is otherwise required to participate, and must register under CRC. A participant must comply with all requirements of the scheme such as reporting emissions, and purchasing and surrendering allowances.
Primary member The organisation within an organisational group nominated to act as the participant in CRC on behalf of all parts of that group and who is taken as representing that group in its dealings with the Administrators.
Pseudo Half
Hourly Metering
Pseudo Half-Hourly Metering is a technique for calculating half hourly electricity supplies where the supply is unmetered. It is defined as a dynamic supply where (i) a setof equipment fixed to land that performs a common function (for example, street lighting), (ii) one element of the set of equipment is metered (for example a lamp post) and (iii) the existing meter point is used as a benchmark to determine the overall supply to the entire set of equipment in a given period.
The period during which electricity supplied through all half hourly meters must be monitored to determine whether your organisation qualifies to participate in the forthcoming phase of CRC. The qualification period for the introductory phase is the 2008 calendar year.
This is the period during which organisations that qualify for the scheme must register with the scheme administrator via the online CRC registry. For the introductory phase, this period is from April 2010 until the last working day of September 2010.
Registry CRC will be administered online via a purpose-built website known as the CRC registry. Participants will register, report, buy and sell allowances and communicate with the administrator via this online system.
Relevant emissions refers to all an organisation’s energy supply emissions, minus those from energy used for excluded activities (transport, domestic accommodation and onward supply of fuel).
Obligation (RO)
The RO is the main support scheme for renewable electricity projects in the UK. It places an obligation on UK suppliers of electricity to source an increasing proportion of their electricity from renewable sources.
A Renewables Obligation Certificate (ROC) is issued to an accredited generator for eligible renewable electricity generated within the United Kingdom and supplied to customers within the United Kingdom by a licensed electricity supplier.
Residual Supplies Residual supplies are any energy supply other than CRC core supplies.
All revenue raised from the sale of allowances every April is returned to participants in the form of a recycling payment to each participant. The payment is in proportion to their 2010/11 emissions, adjusted by a bonus or penalty factor linked to performance in the league table. The revenue recycling occurs six months after the end of each sale, in October.
Safety valve The safety valve is a mechanism by which participants can buy additional allowances from the administrator throughout the year.
Secondary market The secondary market refers to any trade in allowances that takes place between participants or with third parties, i.e. all trading other than the Government’s sale/auction of allowances.
Significant Group
Any individual subsidiary or grouping of subsidiaries within an organisation which would meet the qualification criteria for participation in CRC in its own right, were it not part of a larger organisation. Formerly known as a Principal Subsidiary.
Total footprint
An organisation’s total emissions from energy supplies after subtracting those from excluded activities and those exempt through CCAs.
Voluntary Half
Hourly meter
Voluntary Half Hourly meters are the same type of meters as the mandatory 100 kW HHMs, however as the title implies, they are installed on a voluntary basis at sites below the 100kW threshold.
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EIC Logo CRC - Carbon Reduction Commitment
Carbon Zone Ltd

The Michael Lynch Centre for Enterprise,
71 Princes Street, Ardrossan,
North Ayrshire, KA22 8DG
TEL: +44 (0)1294 475 660, FAX: +44 (0)1294 475 667