The CRC scheme is divided into set time periods known as ‘phases’. Phase 1 is the introductory phase which runs from 1st April 2010 until 31st March 2013. Subsequent phases are preparatory, and overlap with the preceding phases.
This year will be a reporting year only, and participants will not be required to purchase allowances. From 2011/12 onwards, at the beginning of each annual reporting year participants should purchase allowances based on their expected energy sue. During the introductory phase allowances will be sold at a fixed price.
During each compliance year they must report on their emissions and surrender an equivalent number of allowances to cover those emissions. If they do not buy the right number of allowances, they can buy additional allowances or sell the excess.
The first main sale of allowances will be in April 2011, covering projected CO2 emissions for pril 2011 to March 2012. These allowances will be sold by Government for £12 per tonne of C02. The scheme is revenue-neutral overall, meaning all revenue raised from the main sale is re-distributed back to participants according to their position in the annual performance league table.
As a consequence, participants successful in reducing energy consumption will not only save money on energy bilsls, but will need to purchase fewer allowances and will receive greater financial reward through revenue recycling. These savings should be well in excess of the costs of participating in the scheme.
Participants that perform well will also be placed higher in the performance league table, which will be published annually by the Environment Agency.
