Healthcare update - issue 14
The CRC Energy Efficiency Scheme – have you registered yet?
Since our last update the CRC Energy Efficiency Scheme (CRC) is
now in force. The final Order (which you will recall from earlier
updates was expected by the end of last year!) was not passed until
22 March 2010 just days before the long expected formal start date
of 1 April.
The effect of this is that many organisations have fallen behind
with ensuring their registration for the scheme. However, as the
largest public sector emitter of carbon emissions, the NHS has a
vital role to play in the CRC and must ensure prompt compliance. We
take a closer look at the points you need to note.
Validation
Registration includes a stage called “validation” which is
undertaken by the administrator, the Environment Agency (EA). This
can take a minimum of two weeks and the administrator may request
that further information be provided which could mean that this
stage takes even longer. The entire process must be completed by
30th September 2010 and if organisations only complete the initial
submission of information at the end of August it is likely they
will fail to register by the deadline. There are severe penalties
for missing this deadline (see last issue) and the names of
organisations who have not registered by the deadline are likely to
be published on the CRC website from next year. In a world of
increased political scrutiny of public bodies and the related
reputational risks this is something NHS Trusts should be keen to
avoid!
Registration fees
For those Trusts required to register, once an information
disclosure has been submitted and before the registration process
can be completed a participant registration charge of £950 will be
payable which covers the process of registration and carrying out
the necessary checks to enable a ‘compliance account’ to be opened.
This account will monitor the Trusts progress and will ensure its
compliance is fully auditable.
So following registration, what then? Three points to consider
are:
1. Subsistence charges
Once a Trust has registered as a participant, it has to pay an
annual subsistence charge of £1,290 which is payable in full in
April of each year. This charge covers the costs associated with
organisations participation in the scheme in each compliance year
and will not be refunded if you leave (after successfully reducing
your emissions to below the threshold) or join the CRC part way
through a year. Trusts should ensure that their finance team is
involved in the registration process and that the CRC timetable is
reflected in the Trusts financial planning.
2. Audits
The administrator will audit approximately 20% of participants
each year so Trusts in the CRC should anticipate being audited once
every five years. Participants will be selected on the basis of
certain risk criteria and administrators are currently developing a
risk assessment framework to determine how selection will take
place. Developing an internal auditing process based on this
framework may assist Trusts in anticipating any risks and allow
Trusts to report regularly to their Boards regarding the management
of any issues. The CRC also supports the NHS’s pledge to reduce
carbon emissions as outlined in the NHS’s 2009 Carbon Reduction
Strategy ‘Saving Carbon, Improving health’ and the development of
an internal framework will also assist updates to the Board
regarding the Trusts sustainability generally, a subject which is
likely to become a permanent feature on Board agendas in the near
future.
3. Allowances and league tables
More than 20,000 organisations will have to register with the EA
by the end of September this year. However approximately 5,000 of
these organisations, – (those organisations that used at least
6,000 megawatt hours (MWh) of half hourly metered electricity in
2008) will have to report their emissions and from 2011, buy
‘allowances’ for every tonne of CO2 they emit. The aim being to
quantify the amount of energy that organisations use and make them
take direct responsibility for reducing their emissions.
During the 2011-2012 (the introductory phase) allowances will be
sold at a fixed price of £12 per tonne of CO2. All money raised
from allowance sales will be used as reward payments for those
participants who effectively reduce their emissions. Poor
performers will not receive rewards and from next year the EA will
publish an annual league table highlighting the best and worst
performers. Prudent Trusts will recognise that the proactive
adoption of innovative energy efficiency solutions now will not
only increase their chances of making it into the best performer’s
lists but, as sustainability becomes an increasingly important
strategic priority by which Trusts will be measured, also reflect
on the efficiency of the Trust as a whole.
Should you have any queries on the registration process or would
like to discuss ways of making CRC a key priority for your
organisation then we would be delighted to hear from you.
talk to us
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The content of this update is provided for the purposes of
general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.