Definition

Carbon Reduction Commitment (CRC)

The Carbon Reduction Commitment (CRC) is a mandatory emissions-reduction standard in the UK. CRC aims for a carbon reduction of 1.2 million tonnes by 2020 and an 80% cut in carbon emissions by 2050. With the exception of transportation fuels, CRC covers all forms of energy, including electricity, gas, fuel and oil.

The CRC cap and trade plan regulates large public- and service-sector businesses that are not energy-intensive. Most organisations don't fall under the European Union Emissions Trading Scheme for regulation of very large emitters of carbon dioxide but nevertheless contribute significantly to overall emissions. Organisations that must adhere to the CRC include government agencies, hotel chains, office-based corporations and supermarkets.

Allowances will first be sold under a fixed price during the introductory phase starting in April 2010, and then will be allocated through auctions, with the number of credits available diminishing over time. CRC will be applied through self-certification and audits, and at the end of the year, the best and worst carbon emitters will be summarised in league tables. The government will refund revenues from the sale of credits to participating organisations based on their emissions, and participants will be rewarded or penalised based on their rankings in the league tables.

This was last updated in March 2010
Posted by: Margaret Rouse

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