The scheme opened for registration in April 2010 with the registration period closing at the end of September 2010. Emissions already covered by a Climate Change Agreement (CCA) or EU ETS are exempted from CRC. Because the largest energy users in the paper industry (the paper mills) are already in the sector's CCA, the companies in whose name the CCAs are held will be exempted from CRC. Details of how CCA members claim exemption or partial exemption from CRC have been provided to mills.
Any organisation that had at least one half hourly settled electricity meter during 2008 is required to register the amount of half hourly purchased electricity, even if a subsequent exclusion is claimed. Therefore most CPI members - whether in a CCA or not - will have to register for CRC and provide energy consumption data to the Scheme Administrator during the registration period.
CRC responsibility applies at the level of the highest legal entity in the UK – meaning energy data gathering can become complex – once an organisation is in CRC the scheme effectively applies to all energy purchase, not just half hourly electricity. Notwithstanding the CCA exemptions, a number of members will be required to participants in CRC. For these organisations the first period runs form April 2010 to March 2011, with energy use reports required to be submitted by the end of July. During this period organisations will also be required to estimate their 2011-12 energy use and purchase CRC allowances from Government priced at £12 per allowance.
The Environment Agency are the scheme regulators and their web site contains full detail about the scheme.
CPI manages the paper sector CCA and believes the scheme has been a great success for the environment, helping the paper industry make significant energy efficiency improvements and reductions in carbon emission.
The present CCA runs to the end of October 2010 and passing the final milestone target secures the CCL rebate until the start of a new CCA. The new Government has suspended negotiations on a new CCA that the previous Government had intended to run from 2012 to 2017. A further announcement on the future of the CCA scheme is expected in October 2010.
CPI has been heavily involved with the 43 paper mills in EU ETS by advising them on steps needed to comply with the Environment Agency’s rigorous monitoring and reporting procedures, and by arranging and coordinating annual verification activities. CPI has also continued its lobbying and dialogue with Government officials and experts from other industries, and is participating in working groups to help finalise the approach to Phase III of the scheme which starts in 2013.
The pulp and paper sector has been recognised by the Commission as at risk of “carbon leakage” and will therefore get a degree of free allocation of allowances in Phase III – these allocations will be based upon industry-specific benchmarks (for heat use only – no free allocations are made for electricity production) which are being developed by the Commission's consultants Ecofys and which will be finalised in the second half of 2010. The heat benchmarks will be set by the 10% most efficient mills anywhere in the EU, meaning that the vast majority of mills will be short of allowances to cover their heat use and no mills will have free allowances to cover electricity use or generation.
CPI has commissioned a “Fate of Chemicals” project which provides a basis in science for assessing the likely components and effects of (a) low concentration paper mill discharges to the environment and (b) process residues being taken up by products which are later recovered and recycled. The extent of the environmental risk these present have been assessed using established risk management principles. The project has provided the industry and its suppliers with background information to enable them to respond to regulator requirements such as those under Pollution Prevention and Control (PPC) legislation. Chemical data from the participating mills and five of the industry's major chemicals suppliers has been collected and analysed and a final report has been submitted to the Environment Agency for their consideration.
CPI supports the aims of REACH which are to protect human health and the environment, to reduce needless animal testing and to improve the transparency of properties of chemicals; we also approve of the streamlining of legislation which will result. The main impact on the paper industry in the UK will be in terms of its use of industrial chemicals rather than in terms of any production of REACH-notifiable products. Our European trade association, CEPI (Confederation of European Paper Industries), has produced detailed industry guidance on REACH. Briefings have been given to paper mill staff and they have been encouraged to talk to their chemicals suppliers to ensure the uses to which mills put chemicals are registered as part of the REACH process.