The CRC Energy Efficiency Scheme Order 2010

EXPLANATORY NOTE

(This note is not part of the Order)

This Order establishes in the United Kingdom an emissions trading scheme in respect of greenhouse gases under sections 44 and 46(3) of and Schedule 2 and paragraph 9 of Schedule 3 to the Climate Change Act 2008 (c. 27). It applies to direct and indirect emissions from supplies of electricity, gas and fuel by public bodies and undertakings.

PART 1

By article 2, the trading scheme is established for seven phases, the first phase is of three years and commences 1st April 2010. Subsequent phases are of seven years, the second phase commences on 1st April 2011 and subsequent phases commence on each fifth anniversary of 1st April 2011.

Article 3 lists definitions used in the Order, including that participants required to comply with this Order means public bodies defined in Schedule 3 and undertakings defined in Schedule 4, where such bodies or undertakings carry on a business, a charitable activity or a public function (“a scheme activity”).

Articles 4 to 7 set out obligations on participants and powers and duties of the administrator under this Order and provide that supplies of electricity, gas and fuel are defined under Schedule 1. Article 8 provides for liability to comply with this Order for groups of public bodies and undertakings.

Article 9 sets out in respect of the provisions of this Order when the Environment Agency, the Scottish Environment Protection Agency and the Chief inspector are the administrator. Article 10 provides for co-operation between those bodies and national authorities.

PART 2

Article 11 provides how an application for registration as a participant must be made and article 12 by when that application must be made. Under article 13, a certificate of registration is provided to a participant whose application for registration is duly made and a list of participants must be maintained by the administrator.

Article 14 provides for applications for registration to be made by government departments, the devolved administrations and certain local authorities and groups including those bodies. Article 15 sets out when a group of other public bodies exists for the purposes of articles 16 and 17 and those articles provide for registration by public bodies and groups of those bodies not subject to article 14. Under article 18, the administrator may determine whether or not a public body is a member of a group.

Under articles 19 to 22, separate provision is made for the registration of colleges of a university and universities in England.

Article 23 sets out when a group of undertakings exists for the purposes of articles 24 to 26. Articles 24 and 26 provide for applications for registration by groups of undertakings and undertakings not part of a group. Article 25 provides for applications for registration by those undertakings which would have been required to register on their own were they not part of a group (“significant group undertakings”).

Article 27 provides for different provisions for applications for registration by undertakings where the organisational changes described in section 1 of Part 3 of Schedule 6 take place. Under article 28, the administrator may determine whether or not an undertaking is a member of a group and whether or not article 27 applies.

PART 3

Article 29 sets out definitions in relation to exemptions under Part 3, article 30 defines total emissions and article 31 electricity generating credit. Articles 32 to 34 provide for types of exemption related to emissions under climate change agreements. Articles 35 and 36 set out how to claim an exemption. Article 37 provides for the effect of exemptions in relation to the requirements of Parts 4 to 7 of the Order and article 38 provides how an exemption may be lost.

PART 4

Article 39 requires a participant to provide a footprint report concerning supplies during a footprint year and provides for the administrator to determine such a report if the participant fails to do so. Article 40 sets out the effect of a member CCA exemption in relation to calculating footprint emissions defined in article 41. Article 42 provides where a residual measurement list is required and article 43 for the definition of the residual percentage. Article 44 defines a residual measurement list. Article 45 provides by when such a list must be compiled. Under article 46, where organisational changes described in Part 1 or 2 or section 2 of Part 3 of Schedule 6 occur, the requirements in that Schedule must be complied with.

PART 5

Article 47 requires a participant to provide an annual report concerning supplies during an annual reporting year and provides for the administrator to determine such a report if the participant fails to do so. Article 48 sets out the effect of a member CCA exemption in relation to calculating CRC supplies defined in article 50. Article 49 provides for the content of an annual report. The administrator must calculate CRC emissions using the information on supplies in the annual report or as it determines. Under article 51, where organisational changes described in Part 1 or 2 or section 2 of Part 3 of Schedule 6 occur, the requirements in that Schedule must be complied with.

PART 6

Article 52 provides for the validity of allowances for the purposes of compliance with the provisions of article 53 which require allowances to be surrendered by a participant equal to its CRC emissions in an annual reporting year. Article 54 provides for the cancellation of allowances surrendered and for surplus surrendered allowances. Under article 55 the administrator must maintain records in relation to allowances. Article 56 defines Community tradeable emissions allowances.

PART 7

Articles 57 to 60 provide for the maintenance and audit of records.

PART 8

Article 61 defines supplies in relation to Part 8. Article 62 requires public bodies and undertakings which are not participants to provide details in relation to electricity supplies. Under article 63, a participant may request information on electricity and gas supplied to it. The administrator may require information from electricity suppliers under article 64. Occupiers of premises must give assistance to participants under article 65 and franchisees must give information and assistance to franchisors under article 66. Members of public bodies must give information and assistance to participants under article 67.

PART 9

Article 68 provides for the Registry to be established, article 69 provides for security of the Registry, article 70 contains provisions about access to the Registry and article 71 provides for preventing or suspending a person using the Registry.

Article 72 sets out how a registration as a participant may be cancelled where the participant ceases to carry on a scheme activity. Article 73 defines account holders. Article 74 provides how a determination by the administrator under the provisions listed in that article must be carried out.

PART 10

The administrator must compile achievement tables in accordance with articles 75 and 76 and compile performance tables under article 77. Publication of tables and verification of a participant’s position in a table are provided under articles 78 to 80.

PART 11

Article 81 allows the administrator to charge for certain activities set out in article 82 and sets out when a charge must be paid and how it must be calculated. Articles 83 and 84 provide for the amounts of charges and revisions to those amounts. Article 85 provides for the collection and remittance of charges.

PART 12

The administrator may request information concerning compliance with this Order under article 86 and may do so by way of a compliance notice set out in that article. The administrator may inspect premises in relation to monitoring compliance under article 87.

PART 13

Articles 88 to 91 provide powers to the administrator to enforce this Order where a failure of compliance arises.

PART 14

By articles 92 to 105, the administrator may impose civil penalties for failures to comply with provisions of this Order. A penalty may be financial, require additional allowances to be acquired and surrendered or increase what must be regarded as the amount of a participant’s emissions. Use of accounts in the Registry may be blocked and failure of compliance may be publicised. Under article 94, the administrator has a discretion to waive penalties.

PART 15

Criminal offences are imposed under article 106 and penalties for those offences are set out in article 107. Article 108 deals with offences by corporate bodies and article 109 with offences by Scottish partnerships. Article 110 provides for application of this Order to the Crown.

PART 16

Article 111 sets out where an appeal arises, article 112 provides for service of documents and article 113 for national security.

SCHEDULES

Schedule 1 defines supplies and emissions. Schedule 2 defines core supplies.

Schedule 3 defines public bodies and Schedule 4 undertakings and significant group undertakings.

Schedule 5 provides for information required on an application for registration as a participant and in the footprint report.

Schedule 6 sets out organisational changes before and after a phase of the scheme and requirements in relation to those changes.

Schedule 7 provides for requirements of the Registry in relation to Part 9 of this Order.

Schedule 8 sets out requirements in relation to achievement and performance tables under Part 10 of this Order.

Schedule 9 sets out powers of the administrator and authorised persons acting on behalf of the administrator under Part 13 of this Order.

Schedule 10 sets out appeal bodies and procedures and Schedule 11 provides for the service of documents under Part 16 of this Order.

A full regulatory impact assessment of the effect that this Order will have on the costs of business and the voluntary sector is available from the Climate Change Team, Department of Energy and Climate Change, 3 Whitehall Place, London SW1A 2HH and is annexed to the Explanatory Memorandum which is available alongside this Order on the OPSI website.