The SECR is a new mandatory energy and carbon reporting framework that is expected to replace the CRC Energy Efficiency Scheme (CRC EES). It extend the scope of the current Mandatory Carbon Reporting (MCR) regulations for listed companies to include all large quoted and unquoted companies.
A large company is where two or more of the following criteria apply; a company with more than 250 employees, an annual turnover greater than £36m or annual balance sheet total greater than £18m.
The SECR is designed to streamline and reduce complexity in the carbon and energy reporting landscape, as well as broaden the scope to incorporate more businesses that are required to report carbon for compliance purposes.
The only exemption will be those companies using 40,000 kWh or less of energy in the 12-month reporting period will be exempt, as will those unquoted companies where ‘it is not practical to obtain information’.
The new reporting requirement covers energy use including all UK electricity, gas, and transport (road, rail, air and shipping).
For the carbon or greenhouse gas emissions reporting element, this means Scopes 1 and 2 will be required with Scope 3 reporting remaining voluntary. For the GHG calculations a suitable carbon intensity metric of performance indicator is also required for example kWh/per unit of production or kWh/m2 floor area. The narrative will also have to include details of the calculation methodology deployed.
To reduce the additional burden on reporting companies it is expected that the energy and carbon figures will be required to be published in Annual Reports, alongside a high-level commentary on the deployment of energy efficiency measures.
It is anticipated that the scheme will start on the 1st April 2019, as the existing CRC reporting period ends on the 31st March of the same year.
The impacts of the new legislation will vary depending on whether your business has been required to comply with existing regulation.
If you are already reporting under Mandatory Carbon Reporting, there is little change except for the addition of the inclusion of energy use and energy efficiency measures.
If you are reporting and purchasing carbon credits in the CRC EES, then the new SECR regulations replaced the CRC. However, there will no longer be a need to purchase carbon credits – rather the loss of the revenue from the CRC has been offset by an increase in Climate Change Levy for all energy users.
The largest change will come for those organisations who don’t fall into either scheme. However, as the qualification threshold for the ESOS scheme is defined by the business status as a large business then it is likely that most organisations who have had to submit a return for the Energy Saving Opportunities Scheme (ESOS) will be required to report to the new scheme.
As specialists in the monitoring and reporting of energy consumption, greenhouse gas and sustainability reporting, Trident Utilities can work with you to minimise the reporting burden. We can:
if have any questions or want to talk more about routes to SECR compliance, just drop a member of the compliance team a line on 0345 634 9500