The CRC Energy Efficiency Scheme Order 2013

At the Court at Buckingham Palace, the 15th day of May 2013

Present,

The Queen's Most Excellent Majesty in Council

Whereas:the Secretary of State, the Scottish Ministers, the Welsh Ministers and the Department of the Environment of Northern Ireland have in accordance with section 48 of and paragraph 10 of Schedule 3 to the Climate Change Act 2008 —obtained, and taken into account, the advice of the Committee on Climate Change in respect of this Order; andconsulted such persons likely to be affected by this Order as they considered appropriate;andin accordance with paragraph 11 of Schedule 3 to the Climate Change Act 2008, a draft of the statutory instrument containing this Order has been approved by resolution of each House of Parliament, the Scottish Parliament, the National Assembly for Wales, and the Northern Ireland Assembly,

Whereas:

the Secretary of State, the Scottish Ministers, the Welsh Ministers and the Department of the Environment of Northern Ireland have in accordance with section 48 of and paragraph 10 of Schedule 3 to the Climate Change Act 2008 —

obtained, and taken into account, the advice of the Committee on Climate Change in respect of this Order; and

consulted such persons likely to be affected by this Order as they considered appropriate;

and

in accordance with paragraph 11 of Schedule 3 to the Climate Change Act 2008, a draft of the statutory instrument containing this Order has been approved by resolution of each House of Parliament, the Scottish Parliament, the National Assembly for Wales, and the Northern Ireland Assembly,

Her Majesty, in exercise of the powers conferred by sections 44, 46(3), 49 and 90(3) of and Schedule 2 and paragraph 9 of Schedule 3 to the Climate Change Act 2008, is pleased, by and with the advice of Her Privy Council, to order as follows:

PART 1 — Introduction

CHAPTER 1 — General

Citation and commencement

1

This Order may be cited as the CRC Energy Efficiency Scheme Order 2013 and comes into force on the fifth day after the day on which it is made .

The trading scheme: phases and application

2

• (1) This Order establishes a trading scheme in relation to scheme activities for a trading period of six phases which comprise—

• (a) five consecutive phases, each of five years, where the initial phase commences on 1st April 2014; and

• (b) a final phase of four years, commencing on 1st April 2039.

• (2) This Order does not apply to an organisation which enjoys an exemption or relief from taxes under Schedule 1 to the International Organisations Act 1968 .

Interpretation

3

In this Order—

• “the 2000 Act” means the Freedom of Information Act 2000 ;

• “the 2010 Order” means the CRC Energy Efficiency Scheme Order 2010 ;

• “the 2011 Order” means the CRC Energy Efficiency Scheme (Amendment) Order 2011 ;

• “the 2012 Regulations” means the CRC Energy Efficiency Scheme (Allocation of Allowances for Payment) Regulations 2012 ;

• “Academy” has the same meaning it has in section 579 of the Education Act 1996 ;

• “account holder” means the public body, undertaking or other person in whose name an account in the Registry is held or, after the end of 31st March 2022, the public body, undertaking or other person in whose name an account in the Registry was held at the end of 31st March 2022;

• “the Act” means the Climate Change Act 2008;

• “the administrator” has the meaning given by article 9;

• “allowance” means a tradeable allowance issued under regulation 10 of the 2012 Regulations;

• “annual report” means the report described in article 32;

• “annual reporting year” means each year of the phase;

• “appeal body” has the meaning given by article 89;

• “appellant” means a public body or undertaking that has made an appeal under article 87;

• “applicant” means—a public body or group of public bodies; oran undertaking or group of undertakings,required to submit an application for registration as a participant under Part 2 or Schedule 5;

• “appointed practitioner” means a person appointed under the Insolvency Act 1986 to manage—a group member's affairs and business so far as carried on in the United Kingdom, andthat group member's property in the United Kingdom;

• “authorised person” has the meaning given by article 66(3);

• “authorised supplier” means—in respect of electricity, a person who is licensed to supply electricity (or is exempt from requiring a licence to do so) as defined by—section 64(1) of the Electricity Act 1989 ; orArticle 10(1)(c) of the Electricity (Northern Ireland) Order 1992 ;in respect of gas, a person who is licensed to supply gas (or is exempt from requiring a licence to do so) as defined by—section 48(1) of the Gas Act 1986 ; orArticle 6(1)(c) of the Gas (Northern Ireland) Order 1996 ;

• “blocking” has the meaning given by article 81(3);

• “cancellation account” means the account provided by the administrator into which allowances must be surrendered by a participant in compliance with article 36;

• “CCA” means a climate change agreement within the meaning given in paragraph 46 of Schedule 6 to the Finance Act 2000 ;

• “CCA facility” means a facility which is subject to a CCA target during a year of a phase;

• “CCA target” means a target in respect of energy use or carbon emissions under a CCA;

• “charitable purpose” has the meaning given by—section 2 of the Charities Act 2011 in relation to England and Wales;section 7(2) of the Charities and Trustee Investment (Scotland) Act 2005 in relation to Scotland;section 2 of the Charities Act (Northern Ireland) 2008 in relation to Northern Ireland;

• “chief inspector” means the chief inspector constituted under regulation 8(3) of the Pollution Prevention and Control Regulations (Northern Ireland) 2003 ;

• “city college for the technology of the arts” has the same meaning it has in section 482 of the Education Act 1996, as originally enacted;

• “city technology college” has the same meaning it has in section 482 of the Education Act 1996, as originally enacted;

• “civil penalty” means a penalty which may be imposed under Part 12;

• “combined heat and power generation” means the simultaneous generation in one process of thermal energy and electrical or mechanical energy;

• “compliance account” means the account of a participant from which allowances must be surrendered to the cancellation account in compliance with article 36;

• “CRC” means carbon reduction commitment;

• “CRC emissions” has the meaning given by article 33(1);

• “CRC supplies” has the meaning given by article 33(2);

• “day” means a working day except in article 1 and paragraph 3 of Schedule 6;

• “domestic accommodation” has the meaning given by paragraph 18(3) of Schedule 1;

• “enforcement notice” has the meaning given by article 69;

• “EU ETS Directive” means Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC ;

• “EU ETS installation” means—an activity or installation within scope of the EU ETS Directive; andany additional activity not included within Annex 1 of that Directive but approved in the United Kingdom under Article 24 of that Directive;

• “first phase” means the first phase of the trading scheme established under article 2(1) of the 2010 Order;

• “franchise” and the related expressions “franchise agreement”, “franchise premises”, “franchise supply”, “franchisee” and “franchisor” have the meanings given in section 3 of Schedule 1;

• “government decision” has the meaning given by paragraph 14 of Schedule 2;

• “group” has the meaning given by—paragraph 6 of Schedule 2, in respect of public bodies;paragraph 1 of Schedule 3, in respect of undertakings;

• “group undertaking” except where article 21 applies, has the meaning given by paragraph 1(b) of Schedule 3;

• “highest parent undertaking” has the meaning given by paragraph 1(c) of Schedule 3;

• “independent college group” has the meaning given by article 21(1)(b)(ii);

• “kWh” means kilowatt hour;

• “local authority” has the same meaning it has in paragraph 7 of Schedule 1 to the 2000 Act;

• “local authority decision” has the meaning given by paragraph 16 of Schedule 2;

• “maintained nursery school” has the same meaning it has in paragraph 52 of Schedule 1 to the 2000 Act ;

• “maintained school” has the same meaning it has in paragraph 52 of Schedule 1 to the 2000 Act ;

• “metallurgical process” and “mineralogical process” have the meanings given by paragraph 29A of Schedule 1;

• “metering device” means (except in Schedule 9)—in relation to England, Wales and Scotland, a device where the electricity supplied is charged for as measured by the device but not including meters allocated to the following profile classes under the Balancing and Settlement Code Procedure BSCP516 —Domestic Unrestricted;Domestic Economy 7;in relation to Northern Ireland, a device where the electricity supplied is charged for as measured by the device but not including meters that measure supplies to domestic accommodation;a device which during a year of a phase measures more than 73,200 kWh of gas supplied, in relation to the supply of gas;

• “MWh” means megawatt hour;

• “operator” means a person with permission under Part 4A of the Financial Services and Markets Act 2000 to carry on a regulated activity;

• “parent undertaking” has the meaning given by paragraph 1(e) of Schedule 3;

• “participant” means the following registered by the administrator as a participant—a public body or group of public bodies; oran undertaking or group of undertakings,which carries out a scheme activity; and where a participant is a group, subject to Schedule 5, the participant constitutes the members from time to time of that group;

• “participant equivalent” has the meaning given by paragraph 2 of Schedule 3;

• “phase” means one of the six phases of the scheme described in article 2(1);

• “post-application period” means the period after an application has been made in accordance with article 12 but before the first day of the first annual reporting year of a phase;

• “post-qualification period” has the meaning given by article 27;

• “premises” means any—land, vehicle or vessel; orplant which is designed to move or be moved whether on roads or otherwise;

• “principal place of activity” means the principal place—where the applicant, participant or representative carries on the scheme activity applicable to it; orif an applicant or participant carries on more than one scheme activity, where it carries on the main scheme activity;

• “proper address” means in the case of—a body corporate or their director, secretary, clerk, person exercising management control, representative or an appointed practitioner—the registered or principal office of that body, representative or appointed practitioner; orthe email address of the director, secretary, clerk or person exercising management control;a partnership or a partner or person having control or management of the partnership business—the principal office of the partnership; orthe email address of a partner or a person having that control or management;any other person, that person's last known address, which includes an email address;

• “publication” has the meaning given by article 81(3);

• “public function” means any activity carried out by a public body;

• “public body” has the meaning given in section 1 of Schedule 2;

• “qualification day” means the last day of a qualification year;

• “qualification criteria” means that—qualifying electricity is supplied to an applicant for the purposes of a scheme activity; andthe amount of that qualifying electricity satisfies the qualifying amount;

• “qualification year” means, in respect of a phase, the years commencing as shown in the following table—

• Phases: qualification years commencement datesCommencement date of qualification yearsInitial phase1st April 2012Second phase1st April 2017Third phase1st April 2022Fourth phase1st April 2027Fifth phase1st April 2032Final phase1st April 2037

• “qualifying amount” means 6000 MWh or more;

• “qualifying electricity” means electricity supplied to a public body or undertaking in accordance with sections 1 to 5 of Schedule 1, measured by a settled half hourly meter;

• “the Registry” has the meaning given by article 50;

• “regulated activity” means an activity specified in article 51ZA, 51ZC or 51ZE of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ;

• “renewables generation” has the meaning given by paragraph 32 of Schedule 1;

• “representative” means a person appointed under article 55(2);

• “ROC” means a renewables obligation certificate issued further to an order made under—sections 32 to 32M of the Electricity Act 1989 ; orArticles 52 to 55F of the Energy (Northern Ireland) Order 2003 ;

• “scheme” means the trading scheme established by this Order;

• “scheme activity” means to carry on a business or a public function or an activity which has a charitable purpose;

• “settled half hourly meter” applies in relation to a supply of electricity and means a meter which—is able to measure electricity at least every half hour; andenables the supplier to comply with provisions of its licence—in relation to Great Britain, granted under section 6(1)(d) of the Electricity Act 1989 ;in relation to Northern Ireland, granted under Article 10(1) of the Electricity (Northern Ireland) Order 1992,to determine charges between that supplier and another licence holder in respect of the transmission and trading of wholesale electricity;

• “specified facility certificate” means a certificate given by the Secretary of State or the Environment Agency to Her Majesty's Revenue and Customs under paragraph 44(1)(a) of Schedule 6 to the Finance Act 2000 ;

• “subsidiary undertaking” has the meaning given by paragraph 1(e) of Schedule 3;

• “tCO₂” means tonne or tonnes of carbon dioxide;

• “third party” means a person, other than a participant, for whom the administrator has opened an account in the Registry before the end of 31st March 2022;

• “turnover” means—where a participant is an undertaking or group of undertakings, its turnover as defined in section 474(1) of the Companies Act 2006 as if that section—applied to undertakings as defined in this Order; butdid not apply to turnover arising outside the United Kingdom;orwhere a participant is a public body or group of public bodies, the revenue expenditure of the participant;

• “undertaking” has the meaning given in paragraph 1 of Schedule 3;

• “vessel” means, except under paragraph 24 of Schedule 1, any boat or ship;

• “working day” means 9 am to 5 pm on Mondays to Fridays excluding—bank holidays within the meaning of section 1 of the Banking and Financial Dealings Act 1971 , including those bank holidays in part only of the United Kingdom;Good Friday; andwhen it falls on a day that would otherwise be a working day, Christmas Day;

• “year” means 1st April to the following 31st March, inclusive of those dates.

Supplies and emissions

4

As provided under this Order, Schedule 1 (supplies and emissions) has effect concerning—

• (a) whether a supply is made of electricity or gas;

• (b) the amount of such a supply; and

• (c) the emissions from such a supply.

Registration and requirements of participants and others

5

• (1) Part 2 provides for registration as a participant for a phase of the scheme.

• (2) In respect of a phase a participant must comply with—

• (a) Part 3 to provide annual reports on CRC supplies;

• (b) Part 4 to surrender allowances equal to the participant's CRC emissions; and

• (c) Part 5 to keep and audit records relating to the requirements of Part 2 to 4.

• (3) The following have effect in respect of Parts 2 to 5—

• (a) Schedule 2 (public bodies);

• (b) Schedule 3 (undertakings and participant equivalents);

• (c) Schedule 4 (information on registration);

• (d) Schedule 5 (changes to participants).

• (4) Part 6 provides for persons to provide information and assistance to participants and the administrator.

Powers and duties of the administrator

6

The administrator has the powers and duties set out under the following Parts of this Order—

• (a) Part 7 to administer the scheme;

• (b) Part 8 to publish information relating to a participant's performance;

• (c) Part 9 to impose charges;

• (d) Part 10 to monitor compliance;

• (e) Part 11 to enforce failures to comply with this Order.

Penalties, offences, appeals, revocations, continuing effect and amendments

7

• (1) A participant which fails to comply with this Order may be liable under—

• (a) Part 12 to a civil penalty;

• (b) Part 13 to a criminal penalty.

• (2) Part 14 provides for appeals.

• (3) Part 15 provides for revocations, continuing effect and amendments.

Groups: liability to comply with this Order

8