Friday, 9 April 2010

CRC – issues and opportunities for the IT sector

For those who didn’t know, the UK’s Carbon Reduction Commitment scheme, now known as the CRC Energy Efficiency Scheme (CRC EES) came into effect from April 1st (but it’s no joke – see previous coverage for more details). Basically, any business that uses more than 6,000 megawatt-hours of electricity with half-hourly metering will have to buy CO2 allowances.

According to the launch day press release from the Department of Energy and Climate Change, the cap-and-trade scheme has two aims:

• Saving public and private sector organisations around £1billion per year by 2020 through cost effective energy efficiency measures that are not yet being taken up.

• To help change behaviour by requiring large public and private sector organisations like supermarkets, hotels, hospitals, local authorities and central government departments, to improve their energy efficiency.

The scheme is non-revenue generating, with income recycled back to participants according to performance, published in the form of a league table. 

Organisations have until September to register, with a fine of £5,000 if they don’t.  In all, 20,000 organisations are expected to register with around 5,000 fully involved in the scheme. 

By 2020 the scheme is expected to have delivered emissions savings of at least 4.4 million tonnes of CO2 per year.


The CRC is perhaps not the ground-breaking introduction initially expected, given the stalled climate legislation around the world, particularly for cap-and-trade schemes, but it does have a significant impact on the IT sector for a couple of reasons:

• It impacts most data centres.  The UK ICT industry was a little late in realising the impact, by which time the government was set on the CRC course.  Data centre energy usage will inevitably increase with business, even though many large organisations have started to address data centre energy efficiency and are, in any case, using ICT to addresses emissions issues elsewhere in the organisation.

If you supply data centre services, then business is likely to get a boost as companies offload their CRC responsibility.  But reputations will suffer as emissions increases push data centre service suppliers down the league tables, labelling ICT service companies as polluters.

• On the pure plus side for the industry, there are now 20,000 companies that need to be aware of what their energy use is and 5,000 of those will need to monitor, manage and report on their CO2 emissions and buy allowances.  This will give a significant boost to providers of carbon emissions management software solutions.

© The Green IT Review

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