Gordons construction health & safety update - Carbon Reduction Commitment in the construction industry

The CRC Energy Efficiency Scheme is a new UK-wide mandatory emissions trading scheme. It came into force on 1 April 2010.   Under the Scheme organisations will need to monitor their emissions and purchase allowances to emit carbon dioxide (CO2). The more CO2 an organisation emits, the more allowances it will need to purchase, so there is a direct incentive to reduce emissions.

The Scheme  seems set to affect the construction industry in at least four different ways:

• Who does this apply to? - An organisation will need to participate in the CRC in one form or another if it has at least one Half Hourly Meter settled on the half hourly electricity market.  The half hourly electricity market is used by suppliers and generators to calculate the balance or imbalance, in what is generated and consumed, using electricity consumption information that is recorded half hourly.  Half Hourly Meters 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 consumption within a year exceeds 100kW over the previous 12 months'.
  Full compliance is triggered by a Qualification Amount of approximately £500,000 in electricity charges per year.  It is estimated this represents 25,000 businesses nationwide.
• Commercial impact - Compliance will have a commercial impact, both in terms of the cost of buying allowances, and administering the scheme, but also in terms of fines for late submission or non compliance.
• Business reputation and credibility - The CRC could affect business reputation, and impact on successful tendering because performance will be published in a league table and compared with competitors, as will penalties for non compliance. Public sector procurement in particular may be influenced by carbon management credentials.
• Changing the way you work and the skills your business needs. The CRC may affect the type of work that construction companies carry out.  The aim of the scheme is to drive energy efficiency in the public and private sectors.  Those affected will be looking for ways to reduce their energy bills and may introduce CRC-related energy efficiency requirements into project specifications, affecting projects at every stage from design to construction.

If you would like to speak to anyone about the issues outlined in this article, please contact Katherine Southby

Published: 17th June 2010

Katherine Southby

Back to top