CRC - an opportunity for service providers

14 October 2010

CRC registrations have missed their targets but this complex scheme has opportunities for those who build expertise now.

To date 2,781 companies have registered for the CRC and over 11,000 organisations have registered under the scheme, but that is well short of the the 5,000 companies expected to qualify and to ultimately trade carbon credits, and up to 20,000 others just needing to register under the scheme. But as sustainability consultant, Wayne Tantrum explained at a breakfast meeting hosted by Barclays Corporate and Grant Thornton this week, registration and collection of energy data is just the start of a process that stretches into the next few years as the scheme develops.
In a wide ranging discussion about the requirements for organisations under the scheme, the meeting heard that the Coalition Government was not likely to cut the scheme completely as it is a key component of the legal commitment to reduce the UK CO2 emissions by 20 percent by 2050 and the creation of a low carbon economy. On the contrary, once the current scheme which affects those using more than 6000MW hours of electricity roughly equal to a £500,000 bill, is running smoothly, it could be extended to include even more organisations currently not covered.
Tantrum explained that the CRC was driving efficiency and making organisations more sustainable but responsible persons in these organisations needed to fully understand the process. “We have to be sure that we are driving this and it is not driving us,” he said.
He highlighted the opportunities for service providers that do understand the CRC to help their clients who want the ‘hassle’ taken away from them. It can become a core competance for FM service providers, he said, around which they can build strategic advantage in the market.
The group discussed issues arising from PFI/PPP contracts with which the majority shareholder in the consortium was responsible for the energy bill but had no influence over how much energy was used. There was a “We’re paying for it so we will use it” attitude which needed to be changed through engaging with the client. The landlord community was also in a similar situation where energy costs form part of the service charge but they have limited influence on energy use by tenants. As a result renegotiations of leases and new contract terms on lease renewal were now common.
The meeting heard that many clients with mulitple property holdings were not taking a co-ordinated and strategic approach to the CRC, preferring to concentrate on a location by location approach with local responsibility. Tantrum stressed the need for top level engagement in the process with the involvement of finance, HR, IT and FM expertise helping to predict future business needs for energy.
As well as fines being applied to organisations who have failed to meet the 30 September date for registration under the CRC scheme, Tantrum reminded delegates that the CRC report stage needs to be completed by April 2011, and he suggested that mandatory reporting could be introduced by 2012. He said that organisations need develop their team and have a buying and selling strategy as soon as possible.
In conclusion, Tantrum said “The CRC is not going away, and it is an opportunity for service providers that understand the regulations and documentation that they can use to their strategic advantage and drive the cultural change.”