Agenda item

CARBON REDUCTION COMMITMENT (CRC) SCHEME: 2010 ANNUAL REPORT

As this report will also be considered by the Executive and Resources PDS Committee on 5th January 2011 and the Executive on 12th January 2011, the report is provided to Members under separate cover. Members are requested to bring their copy of the report with them to any of the meetings considering this item. 

Minutes:

Report ES10189

 

Concerning the Carbon Reduction Commitment statutory scheme it was reported that the coalition government no longer intended to redistribute allowance revenue among participants but would retain the revenue to support public finances, thus effectively becoming a carbon tax and significantly increasing the Council’s projected financial liabilities.

 

The Carbon Reduction Commitment (CRC) scheme remained central to the Government’s strategy for delivering targets set out in the Climate Change Act 2008 and measures were already being taken by the Council to reduce carbon emissions and hence projected financial liabilities.

 

Based on the Council’s Carbon Management Programme (CMP) data, the Council’s 2009/10 CRC footprint would be 31,952 tonnes and projecting this data, a 2011/12 CRC footprint of 32,152 tonnes was calculated. With allowances to be purchased (initially at £12/tonne CO2) retrospectively to cover the carbon emissions associated with the Council’s operational property, schools and street lighting, a cost of £353,743, rising by more than £100k per annum, was currently being projected. Maintained schools were projected to be the largest single element of the Council’s carbon.

 

The October 2010 Comprehensive Spending Review (CSR10) announced that revenue raised from the sale of CRC allowances would not be recycled back to participants but used to support the public finances and the first sale of CRC allowances, accounting for 2011/12 emissions, would be held in July 2012 rather than in April 2011. Each phase of the scheme would also be extended by one year. The requirement to report on 2010/11 emissions remained.

 

Members were apprised of possible future changes. The future of the emissions cap was currently under review as was the trading system element. It therefore remained unclear what price allowances would be present in future phases of the CRC and how prices would be determined. 

 

Members were also informed about Data Management and the Evidence Pack which was a key element of the scheme and necessary for audit from August 2011. It was also reported that the performance league table would be retained but no longer used for the purpose of revenue recycling. The league table would now function principally as a reputational driver.

 

In discussion there were a number of comments and suggestions.

 

A question was asked on whether local MPs were being lobbied on how they felt about the CRC Scheme. In advocating reduced energy use, the Portfolio Holder felt that the matter was now essentially a financial one with the interest of the Environment Portfolio essentially focusing on street lighting with other interests such as energy management at Council properties and schools being the responsibility of other portfolios.

 

It was noted that under the CRC Scheme the Council currently had responsibilities for academy schools as well as maintained schools. The Chairman felt that the Executive should be recommended to write to the Secretary of State for Education about this highlighting the anomaly that academy schools appeared to be outside of the Authority’s control except for the payment of carbon emissions.

 

In response to a question about energy management and the Council’s estate, Members were advised that it was possible to calculate energy/carbon savings from a reduced Council estate and some work had already been carried out on this.

 

Councillor Julian Grainger suggested the on site use of renewable energy to help reduce liabilities under CRC noting that there were also generous feed in tariffs from renewable energy production. He suggested that a feasibility study be undertaken on using on site renewable generation facilities. In asking for details of costs associated with ground source and source heat pumps, Councillor Grainger enquired whether such generation facilities could be extended to street lighting. The Chairman supported Councillor Grainger’s comments agreeing that they should be referred to the Executive for consideration. It was understood that an air source heat pump would take some eight years to generate a saving and that a ground source heat pump would take some 15 years to achieve a saving.

 

It was confirmed that feed-in tariffs could be claimed with payment made by the energy supplier. It would still be necessary to buy the CRC allowance and it was necessary to consider the value of energy efficiencies (reduction) against renewable energy. It was suggested to Members that energy efficiency would be more cost efficient than renewable energy – energy efficiency measures would tend to pay back in less than five years and renewable energy would typically start to pay back after eight years.

 

RESOLVED that the Executive be recommended to:

 

(1) note the statutory duty on LB Bromley to comply with the CRC scheme, the likely costs arising from this ‘tax’, and the potential for civil and criminal penalties;

 

(2) endorse the need for sustained action to reduce energy use and carbon emissions and improve data management to minimise the Council’s financial liabilities under the scheme;

 

(3) receive a further report setting out the Council’s progress under the scheme and a forecast of its future financial liabilities in one year’s time;

 

(4)write to the Secretary of State for Education to enquire how it was proposed that local authorities should work with academy schools to reduce their energy consumption and deliver the Council’s responsibilities under the CRC Scheme; and

 

(5) ask the Improvement and Efficiency Sub Committee to look at further ways of reducing energy consumption and to look at benefits associated with renewable energy generation, feed in tariffs and other similar measures. 

 

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