How to order, surrender and trade allowances.
For each compliance year, you need to order, pay for, and surrender allowances to cover your annual Carbon Reduction Commitment (CRC) CO2 emissions.
You can order allowances from government sales or buy from the open market using the CRC Registry.
Each year there will be 2, fixed price government sales of allowances:
- a forecast sale at the beginning of the compliance year in April
- a buy to comply sale during the reporting period in June and July
The price of allowances at the forecast sale will be lower to encourage you to forecast your emissions early and buy allowances in advance.
During a government sale of allowances, you can submit as many orders as you like but only while the sale window is open.
You can buy allowances on the open market at any time if a trader or other participant is offering them for sale.
You use the CRC Registry to order allowances from a government sale or to identify allowances being traded on the open market.
The CRC Registry guide ‘How to order allowances’ provides further help.
To order allowances, you need to have a senior officer who exercises management control, plus at least 2 more people authorised to access your compliance account – known as ‘authorised contacts’. These can be your primary contact, secondary contact or nominated agent or account representative, if you have appointed one.
When you order government allowances, your authorised contacts and senior officer receive a confirmation email. Attached to this email will be a memorandum of account with payment details.
You must pay the Department of Energy and Climate Change (DECC) using the bank account details provided in the memorandum of account. DECC need to receive your cleared funds before the deadline specified.
Allowances won’t be allocated to your registry account until your payment has cleared. If you miss the payment deadline, you won’t receive your allowances before the deadline and you could risk a financial penalty.
Your authorised contacts and senior officer receive a confirmation email once your allowances have been allocated to your compliance account.
If you have underpaid or overpaid, the Environment Agency CRC team will contact you.
For under payments, you can either:
- pay the outstanding balance before the end of the payment deadline, or
- revise your order in the registry
- you will only be allocated the number of allowances you have ordered
- DECC will refund your overpayment as soon as is possible but may deduct their bank charges
You need to notify the CRC helpdesk - CRCHelp@environment-agency.gov.uk - immediately if you receive more allowances than you have paid for.
If you have bought or sold allowances through a trade rather than a government sale, you arrange payment directly with the organisation you have bought from or sold to.
Validity of allowances
Forecast sale allowances are sold in April each year. They are valid for the compliance year in which they are sold and for future compliance years until the end of the CRC phase.
You can’t surrender forecast allowances to cover CO2 emissions from previous compliance years.
Buy to comply allowances can be surrendered for the previous compliance year’s emissions and are also valid through to the end of the CRC phase.
If you buy too many allowances in one year, you can keep these in your CRC compliance account and use them in future compliance years during the same CRC phase.
Allowances are not transferrable from one phase of CRC to another.
Trading allowances means buying from or selling to another account holder in the CRC Registry. The registry has a notice board facility that matches buyers and sellers.
Your authorised contacts need a one time pass code (OTP) to transfer allowances to another participant as part of a trade. This is an additional security measure to check the identity of the person making the trade and prevent fraud.
To be able to receive an OTP an authorised contact must first:
- undergo an ID check
- register their mobile phone number
You request an ID check and register your mobile phone number via the CRC Registry.
Each time an authorised contact is ready to transfer allowances they request an OTP through the CRC Registry. The OTP will be sent to their mobile phone. When they enter the OTP into the appropriate field in the registry the transfer is confirmed.
All of your authorised contacts can order and surrender allowances, but only 3 authorised contacts at any one time can be approved for an OTP.
The guide ‘How to trade allowances’ provides more help.
Each compliance year you must surrender allowances equal to the quantity of CRC emissions calculated from your annual report.
The deadline for surrendering allowances is the last working day in October. If you don’t surrender the correct number of allowances by the deadline, you may face financial penalties.
If you didn’t buy enough allowances to cover your emissions, you should surrender as many allowances as you have by the deadline. This will help minimise your liability to penalties.
You can request a special allocation of allowances if the Environment Agency has sent you an enforcement notice or civil penalty asking you to surrender allowances. The CRC helpdesk - CRCHelp@environment-agency.gov.uk - can help you arrange this.
If you surrender too many allowances the surplus will count towards your surrender obligation for the next compliance year. Or, in some circumstances, you can request a refund from DECC. Your should use the DECC ‘CRC repayment request form’ to request a refund.
The DECC ‘Guidance on the CRC repayment mechanism for surplus allowances’ provides more information about refunds.
Help and guidance
Allowance prices for each compliance year are set by government. They’re published on the CRC Energy Efficiency Scheme page.
Requirements for those registered in CRC Phase 2 are available in ‘CRC: guidance for participants in Phase 2’.
The CRC Registry guide ‘How to surrender allowances’ provides information to help you surrender allowances.
Contact the Environment Agency
Telephone: 03708 506 506
Published: 8 April 2014
From: Environment Agency
Part of: Energy efficiency
Related guides: CRC Energy Efficiency Scheme: account or organisation changes CRC Energy Efficiency Scheme: annual reporting CRC Energy Efficiency Scheme: qualification and registration CRC Energy Efficiency Scheme: evidence, audits and penalties CRC Energy Efficiency Scheme: annual report publication