Big bill for CRC emissions

Tesco faces having to pay out more than £21 million in April 2012 for its emissions under the Carbon Reduction Commitment (CRC) Energy Efficiency scheme, while participation could cost Edinburgh City Council (ECC) £991,500.

Changes made to the CRC in the Comprehensive Spending Review in November 2010 mean that revenues from the scheme will no longer be recycled to participants, effectively turning the scheme into a carbon tax and generating an estimated £1 billion for the Treasury in 2014–15.

Previously, participants would have received at least a proportion of the money spent on buying allowances to cover their CRC emissions (at £12 a tonne) based on their position in an annual performance league table, with the best performers getting back more than they paid out.

Edinburgh-based consultants Carbon Masters have calculated the financial impact of the changes on Tesco and ECC and a number of registered participants, based on organisations’ published carbon emissions data.

It warns that councils and other public bodies will be hard hit (see our Insult to injury? article), calculating that Aberdeen City Council, for example, which has struggled financially in recent years, is facing tax of £800,000 on top of projected energy costs of £9.9 million.

Carbon Masters has calculated the minimum cost at £42,000, and has advised participants to take advantage of the one-year delay in having to purchase allowances – which was also announced in November – to invest in energy-saving measures to reduce their CRC liability.