1. Carbon Reduction Commitment (CRC) Matthew Croucher SMMT 3 May 2009

2. Contents What is the CRC? Are you covered by it? Timeline of the scheme Key industry concerns over the scheme The franchise/dealer issue SMMT action

3. Simple scheme to cut CO 2 For those outside CCA and EU ETS

4. What is the CRC Encourage energy efficiency and lower emissions Cap and trade scheme Have buy allowances to cover emissions used (at auction) Annual reporting – performance in league table – public Revenues recycled based on position in table (+/-50%) Takes account of growth Has a 3 year introductory phase Comes into effect in April 2010

5. CRC – are you covered? Covers organisations Organisation – NOT site/group Do have half-hourly electricity meters? Do they consume 6,000MWh (>£500,000) If in scheme, then all energy must then be included Energy covered by CCA/EU ETS not in scheme Exemptions for CCAs (if 25% subsidiary in CCA) VMs to take responsibility for dealers

6. CRC – timeline

7. SMMT’s key concerns Does not appear a simple scheme Dealers – burden on VMs, but they have little control Definition of organisations – knowing legal structure Impact on cash flow a concern Introductory phase needs to be more ‘lenient’ Difficult to gauge how much of sector will be covered Difficult to ascertain how sector will perform relatively Could impact adversely on electric car demand?

8. Dealers Change definition of ‘franchise’ ‘Does so exclusively under a trading name provided by the franchisor’

9. SMMT action SMMT wrote to Ed Miliband requesting meeting SMMT meet with DECC on dealer issue Revised definition of franchise To respond to consultation – 4 June CBI to include our franchise definition in their response To follow up with DECC on dealer issue, and involve BERR To work with RMIF on dealers energy efficiency Carbon Trust funded voluntary programme To undertake another awareness campaign with members

10. For further details mcroucher@smmt.co.uk 020 7344 1640 Any questions? http://www.defra.gov.uk/environment/climatechange/ uk/business/crc/index.htm