Terms that appear in capital letters in this update are defined in Practice note, CRC Energy Efficiency Scheme: PLC glossary and abbreviations.

The CRC Energy Efficiency Scheme (CRC) is a new UK-wide emissions trading scheme for companies and other organisations in the private and public sectors. The CRC came into operation on 1 April 2010. Phase 1 of the scheme (the Introductory Phase) currently runs from 1 April 2010 to 31 March 2013 although the government is currently consulting on extending the Introductory Phase to March 2014. For more information, see Legal update, CRC: DECC consults on amendments to the CRC Order 2010.

Participants will have to buy and surrender Allowances that equate to their CRC Emissions in each Annual Reporting Year (ARY) of a Phase. The government will rank Participants in a League Table that will be published following the end of each ARY. During Compliance Years 2010/11, 2011/12 and 2012/13 of the Introductory Phase the League Table will rank Participants based on their respective performance in three metrics.

The three metrics are:

The EAM will only apply in relation to Compliance Years 2010/11, 2011/12 and 2012/13. Even if the Introductory Phase is extended to include Compliance Year 2013/14, the EAM will not be extended to cover this year.

The EAM is designed to give Participants credit for actions they took prior to the introduction of the CRC to reduce their emissions (carbon footprint). The EAM is based on two equally weighted factors, which have been chosen as proxies for good energy management. One of these factors is the percentage of a Participant's CRC Emissions that are covered by either the Carbon Trust Standard (CTS) or another scheme that accredits energy efficiency and which has been recognised by the Environment Agency (EA) as equivalent to the CTS.

The Department of Energy and Climate Change (DECC) published the criteria by which equivalent accreditation schemes applying for recognition would be judged (see DECC: Guidance on the Early Action Metric under the CRC Energy Efficiency Scheme: Carbon Trust Standard Equivalent Schemes).

For more information on:

On 9 December 2010, the EA recognised Lloyd's Register Quality Assurance Ltd's Carbon and Energy Management Scheme (CEMS) as equivalent to the CTS (for more information, see the Lloyd's Register Quality Assurance website).

Organisations that are certified under CEMS in each of Compliance Years 2010/11, 2011/12 and 2012/13 will receive a score under the EAM, which will improve their rankings in the League Table in the relevant Compliance Year.

CEMS is the fifth scheme to be recognised as equivalent to the Carbon Trust Standard.