As scheme administrator the Environment Agency will have overall responsibility for enforcing the scheme.

As with the footprint reporting, annual reporting is done via the CRC registry. Participants will be required to submit their own figures and around 20% of participants will be independently audited each year by regional regulators on a rolling basis.

Reports on annual emissions must be submitted by the last working day of July after the end of the annual reporting year, along with a corresponding number of allowances valid for that annual reporting year. For example, if 1,000 tonnes of CO2 are reported, 1,000 allowances must be surrendered.

In the introductory phase, the first annual reporting year is also the footprint year for the first phase, so both annual report and footprint report have to be submitted at the same time – by the end of July 2011.

Consequently, organisations will have four months to collate and validate data for the annual report, update their evidence packs (see below) and purchase further allowances.

Evidence packs

The evidence packs submitted as part of the annual reporting process will need to include the following details:

  • Details of the organisation
  • The organisation’s annual energy consumption
  • Early Action metric details
  • Growth metric details
  • The same details as above for any significant subsidiaries
  • Data records, structural records and information about any special events

Audits

To ensure the integrity of the scheme around 20% of participants will be audited every year by regional administrators. This will be on a rolling basis so that all participants can expect to be audited at some stage – and they will be required to have information from previous years available.

Consequently, the integrity of all data is of paramount importance. It must be complete, up-to-date and, ideally, audited to recognised standards. Failing to provide data to a high enough standard can result in significant fines (see below).

The Audit Process

Each audit will start with a desk-based assessment of the evidence pack to verify that the data is correct and is based on sufficient records. This may then be followed by site visits if the auditor thinks this is necessary. Site visits may result from conclusions that are drawn during the desk-based assessment or simply for random sampling purposes.

Failing the audit

The penalties for failing to satisfy the audit requirements are outlined below:

  • Emissions information is incorrect -  £40 per tonne of CO2 incorrectly reported.
  • Other reported information is incorrect  - £5,000 fine
  • Incorrect information affects league table position – a fine of double the amount of any financial gain resulting from improved position
  • Failing to keep adequate records in the evidence pack – penalty of £40 per tonne of CO2 of total emissions reported in the most recent annual report – plus ‘naming and shaming’ for non-compliance.