This section provides information on the exclusions and rules within the CRC Energy Efficiency Scheme.
Climate Change Agreement (CCA) exemption
As a general rule, any supplies that are covered by a CCA do not need to be included in your Annual Report. If a significant proportion of the emissions from an organisation’s or group’s supplies are covered by a CCA, they may have claimed an exemption from CRC altogether. Therefore any site or company that has a CCA exemption, supplies (activities) covered by that CCA will not count towards the total quantity but will show up in the CRC report under exemptions under the CCA category.
European Union Emission Trading Scheme (EU ETS) exemption
For Phase 2, all electricity and gas consumed for the purpose of operating an EU Emissions Trading System (ETS) installation doesn’t count as a supply. Any electricity or natural gas activity which is created as an EU-ETS exemption will appear in the CRC report under the EU-ETS category of exemptions and will not be counted towards the total CRC number.
Domestic Accommodation - Electricity and Gas Supplies
Domestic energy use is to be excluded from CRC regardless of supply arrangements. Accommodation on residential parks and holiday parks are excluded. There are exceptions to the exclusion where housing is provided for the purposes of education, employment, religion, recreation and medical care. Examples include university halls of residence, prisons and care homes. For mixed use sites Participants will be required to identify and remove the energy consumption associated with domestic accommodation when determining qualification and reporting emissions during the scheme. These are also not included in CRC total but reported as Domestic Accommodation.
Profile 01-02 Meter (also falls under Domestic Accommodation)
All supplies through 01 (domestic unrestricted) and 02 (domestic Economy 7) electricity meters are now excluded. Gas supply less than 73,200 kWh in the compliance year is also excluded, the system will automatically calculate for this. The annual threshold of gas supplies of 73,200 kWh may mean that a gas supply may come in or fall out each year. These are not included in CRC total but reported as Profile 01-02 Meter.
For qualification purposes, all transport is excluded (road vehicles, rail (electric and diesel), aircraft, water-borne craft). On-site transport (any non-road vehicle that is used on-site) such as forklifts electric and gas powered is the exceptions to this exclusion. The Transport Exemption applies to that electricity and gas directly used in the operation of the transport vehicle (electric rail). However, offices and buildings within the transport company (train stations) are included.
Non-Heating Use – Natural Gas Excluded
“Gas (used for heating purposes only)” refers to gas used in any process which involves heating other than for generating electricity therefore participants can generally assume that all the gas which they consume is used for heating. All other gas use excluded for example gas use for machine drives.
Unconsumed Supply Rule
Unconsumed supply is the amount of electricity not consumed where an organisation passes on some or all of its supply of electricity to another company that is not a tenant. This supply is measured by a metering device or a device that measures electricity but doesn’t charge for it. The rules surrounding unconsumed supply have been amended in Phase 2 so that organisations that pass on unconsumed supply that is unmetered will now be responsible for this supply. However in the case where the purchasing company have a meter on the electricity consumed by someone else, then this is the unconsumed supply that is reported to the CRC as an exemption. The unconsumed supply rule doesn’t apply where the landlord has responsibility for the supply under the landlord tenant rule, or a franchisor is responsible for the supply to its franchisee. Unconsumed supply also does not count towards the total CRC number.
Electric Generation – The rules on electricity generation are complex. In brief, where an undertaking generates electricity and uses it within its own organisation (self-supply), it will need to account for that self-supply under the Scheme (unless the self-supply is further used for certain electricity or gas generation or distribution purposes, or is from certain post-2008 on-site renewable generation facilities).
Given that input supplies of gas or other fuels used for electricity generation no longer have to be included in the Scheme, the previous complex system of Electricity Generation Credits (EGC) has been abolished as from the Initial Phase. Electricity purchased from suppliers under 'green tariffs' is not treated any differently from any other form of electricity supply for CRC purposes.
Sold – When a company is sold in the middle of the reporting year company the Sold exemption is applied.
Disaggregated - If you wish to disaggregate a Significant Grouping Undertaking (SGU) from the Parent organisation and have it report to the CRC on its own. The SGU will be treated as a separate participant for the remainder of the phase.
Self-Supply - Self-Supplied Electricity Used in Relation to Electricity and Gas Production Exclusion
Under Phase 2 any self-supplied electricity used directly for generation, transmission or distribution of electricity and any electricity used for transporting, supplying or shipping gas is excluded. When assessing qualification for Phase 2 you must only count electricity supplied through half hourly meters.
Self-supplied gas and electricity used for all other purposes (for example, running the organisation’s offices or call centres, including those at a generation site) are included in CRC.
Electricity Generating Credit (EGCs) – This option no longer exists as EGCs have been removed from the CRC scheme in Phase 2. Onsite generated electricity must be recorded in the Annual Report.
Unassigned Meters – Previously used in Carbon counter. For meters that are imported but not assigned to building or asset (site) and are no longer in use. These will not be an option in the system going forward..
Landlord Tennant Rule
The landlord tenant rule is an exception to the normal rule that the consumer of the supply is responsible in CRC. The landlord tenant rule says that:
· A landlord is responsible for the supply where the landlord receives or pays for the supply and passes it on for the tenant to consume.
· The tenant is responsible for the supply where the tenant receives a supply from someone other than the landlord.
The landlord tenant rule applies to each supply individually. For example, if the landlord purchases the electricity then the landlord will be responsible for the electricity, and if the tenant purchases the gas, the tenant will be responsible for the gas.
This rule applies to: lease and licence arrangements to occupy a premises sub-landlord and sub-tenant arrangements.
Changes have been made in Phase 2 so that the landlord tenant rule doesn’t apply where a construction lease has been entered into. For the purpose of the CRC a construction lease is a lease entered into between A and B for a minimum period of 30 years.
If you are a franchisor you are responsible for the energy supplies of your franchisees. However if a franchisee is a tenant that is supplied electricity from a landlord the landlord is responsible for the energy supply not the franchisor. This is because in the CRC the landlord/tenant rule overrides the franchise agreement. To comply with the rules of the CRC scheme, franchisees are required to provide such information and assistance as the franchisor might reasonably require enabling the franchisor to register for and comply with CRC.
Other – Any other exemption or exclusions not mentioned in the above.
Out of Scope – Not under the scope of the CRC.
Users will need to keep records of removal of the emissions from all excluded/exempt sources (for example, excluded domestic accommodation, transport and supply to others) used as part of your qualification data and when compiling your CRC Report. Best practice is to keep evidence of any changes to exceptions and exclusions. Copies of exceptions and exclusions can be uploaded to the document manager repository for the CRC evidence pack.