Tuesday 26th of February 2019 | Posted In: Compliance, Comply

SECR… You may not have to comply, but it will affect you

Streamlined Energy & Carbon Reporting (SECR) will replace the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme from April 2019.

The CRC Energy Efficiency Scheme has been in operation since 2010 and currently affects about 4,000 companies that consume at least 6,000 MWh through half-hourly settled electricity meters. Participants have to buy and surrender allowances equal to the tonnes of CO2 emissions associated with their electricity and gas supplies. The Government has chosen to replace the scheme in order to simplify and align policies relating to energy efficiency.

The closure of the CRC Energy Efficiency Scheme will result in a loss of income to the Treasury; but here’s the kicker… the intention is to make this up with an increase in Climate Change Levy (CCL) charges on everybody’s energy bills. This will not only affect those larger companies that are already part of the scheme but all smaller businesses too.

SECR is supposed to be less onerous than the CRC scheme ever was, both financially and administratively, but is expected to have a greater reach, with an estimated 12,000 companies affected. Those who will need to comply will be (amongst others):

  • Listed Companies – those on the Stock Exchange
  • ‘Large’ Companies as defined in the Companies Act 2006
  • Limited Liability Partnerships (LLPs)

It is important to note that the definition of ‘large’ is different from that used for the Energy Savings Opportunity Scheme (ESOS). In this instance, it will affect companies with at least 250 employees, a turnover of greater than £36m, and a balance sheet in excess of £18m, a slightly lower threshold than ESOS. Those affected will need to report (if not already doing so) UK energy use from electricity, gas and transport as well as the associated scope 1 and scope 2 GHG emissions from April 2019 onwards. On top of that, organisations will have to provide a narrative commentary on energy efficiency action taken in the previous financial year.

The change has been proposed with the best of intentions and will be a welcome cutting of red tape (and costs) for those who previously had to comply with the CRC scheme. However, until the Government publishes its ESOS phase 1 impact evaluation report, the interaction and similarities of reporting between ESOS and SECR will not be addressed. So organisations that are already complying with ESOS will also have to comply with SECR in the short term. In any case, an increase in energy bills is likely for all…

If you have any questions or would like to find out how we can help you with your compliance to these schemes please give me a call on 024 7669 8899.