CRC Initial Phase (Phase 2)—issues in finance transactions [Archived]
CRC Initial Phase (Phase 2)—issues in finance transactions [Archived]

The following Environment practice note provides comprehensive and up to date legal information covering:

  • CRC Initial Phase (Phase 2)—issues in finance transactions [Archived]
  • How could the CRC Scheme affect lenders?
  • What do lenders need to know about the CRC Scheme?
  • How does the CRC Scheme work?
  • Qualification and registration
  • Reporting
  • Purchasing and surrendering allowances
  • Evidence packs and notifying changes
  • What are the penalties for non-compliance?
  • Civil penalties
  • More...

CRC Initial Phase (Phase 2)—issues in finance transactions [Archived]

ARCHIVED: This Practice Note has been archived and is not maintained.

The CRC Energy Efficiency Scheme (CRC Scheme) was a mandatory emissions trading scheme in the UK that aims to cut carbon dioxide emissions and improve energy efficiency in large non-energy-intensive public and private sector organisations. It is important to note that although energy-intensive public and private sector organisations fall outside of the CRC Scheme, separate schemes apply, for example:

  1. emissions from industrial processes (such as power plants), which would be relevant to project finance transactions, could be covered by Climate Change Agreements or the EU Emissions Trading Scheme—see Practice Notes: Climate change agreements (CCA),EU Emissions trading system—outline and When is a greenhouse gas permit required under Phase III EU ETS?

  2. emissions from certain aviation activities, which would be relevant to aviation finance transactions, are regulated by the EU Emissions Trading Scheme—see Practice Note: EU emissions trading system and aviation

Organisations that qualified for the CRC Scheme had to purchase allowances for every tonne of carbon dioxide they emitted with financial penalties (both civil and criminal) for those organisations that failed to comply.

Lenders could be affected by the CRC Scheme if their organisation qualified in its own right or through their involvement with borrowers. They, therefore, need to understand how the CRC Scheme works, so that they

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