Analysing the Impacts of a Carbon Emissions Trading Scheme on the UK Water Industry: The UK Carbon Reduction Commitment (CRC)

The Carbon Reduction Commitment (CRC) is the first mandatory emissions trading scheme to capture the UK water companies, and will come into force on 1st January 2010. The Scheme has been introduced by the UK government to reduce emissions in the non-energy intensive public and private sectors which emit 10% of the UK’s emissions and captures those organisations not already covered by the CCAs or the EU ETS. The Scheme will form part of the wider Climate Change Bill and caps will be set in line with carbon reduction targets from the Bill.

The water industry is unique in terms of its impact on the CRC, as it will be the biggest and therefore most influential player in terms of energy use and emissions. There are a number of key challenges for the water industry, and it is important that the industry strikes a balance between increasing quality and reducing emissions, and strong government lead will be essential to achieve this. Additionally there is a major role for increasing awareness of the impacts of other sectors through the Committee on Climate Change and an increase in investments in R&D for developing low carbon solutions. Further challenges have been explored and strong government lead is essential to tackle these and ensure the water industry is adequately incentivised to participate in the scheme and make emissions reductions.

This research projects attempts to identify the impacts of the CRC on the UK Water industry- the only energy intensive industry to be captured by the scheme; through consultations with key industry representatives. The project aims to understand the impact of key national carbon reduction policies on the UK water industry; identify company level carbon reduction strategies and plans for the future; and explore the key challenges presented by the CRC for the UK water industry, making recommendations for further development.