The government has confirmed the framework for the new Streamlined Energy and Carbon Reporting (SECR), scheduled to commence in April 2019. SECR replaces the reporting element of the CRC Energy Efficiency Scheme, which ends next year. However, it will cover approximately 11,300 companies compared to just 4,000 that currently have to comply with the CRC.
The new requirement aligns with Mandatory Greenhouse Gas reporting, already in place for companies listed on the stock exchange.
SECR will apply to large companies. That is, those where two or more of the following criteria apply to a company within a financial year:
- More than 250 employees
- Annual turnover greater than £36m
- Annual balance sheet total greater than £18m
The consultation response outlines the requirements for businesses to report carbon emissions in their annual reports. This is already mandatory for quoted companies, that should continue to disclose scope 1&2 emissions and an intensity metric (as an example, this could be shown as tonnes CO2e per £m revenue). The reporting of scope 3 emissions will remain voluntary.
Unquoted companies will follow the same requirements from April 2019, which means that as a minimum reporting will include gas, electricity, and transport. Large companies are already measuring their energy consumption for ESOS, including transport. The government therefore sees this as a natural extension to existing requirements and further streamlining of carbon reporting. BEIS has advised Alfa Energy that updated reporting guidance is expected to be in place by the end of the year.
Under SECR, annual reporting must include a narrative to give a high level overview of energy efficiency measures. However, companies will not be required to disclose ESOS recommendations and how they have taken these forward, as had been suggested in the original consultation.
The CRC Energy Efficiency Scheme (Revocation and Savings) Order 2018 was laid before Parliament last week. This Order will come into force on 1st October this year and will abolish the CRC when its current phase ends. This means that the final CRC report must be submitted by the end of July 2019, to cover the 2018/19 year. CRC allowances must be surrendered by the end of October 2019.
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