By David Bicknell
In a press release today, the Department of Energy & Climate Change has announced a consultation on simplifying the Carbon Reduction Commitment (CRC) Energy Efficiency scheme.
DECC says that participants will see their administrative costs cut by almost two-thirds, equating to around £330 million of savings up to 2030.
CRC is a mandatory UK-wide trading scheme covering large business and public sector organisation, who produce 12% of UK carbon emissions. It requires businesses to report on and pay a tax on energy used, and ranks businesses in a performance league table which provides a further reputational incentive to improve their energy efficiency.
Following Chancellor George Osborne’s criticism of the scheme’s complexity in last week’s Budget, DECC now says businesses will now have the opportunity to comment on Government’s proposals.
The simplified package proposed is aimed at retaining the energy-saving and reputational benefits of the CRC, whilst reducing the bureaucracy of taking part.
Secretary of State Ed Davey said:
“We have listened to businesses’ concerns about the CRC and have set out proposals to radically cut down on ‘red tape’ to save businesses money. The benefits of the scheme are clear though. It will deliver substantial carbon savings helping us to meet carbon budgets, and it encourages businesses to take action to improve their energy efficiency”.
DECC says the simplified package will include:
- A shortening of the CRC qualification process.
- Reducing the number of fuels covered by CRC from 29 to 4.
- Reducing the amount of reporting required by businesses.
- Reducing the length of time participants will have to keep records.
- Removing the requirement on facilities covered by Climate Change Agreement or EU Emissions Trading System installations to purchase CRC allowances.
- Adopting new emissions factors for the CRC which will align it with Greenhouse Gas reporting processes.
- Removing the detailed metrics of the Performance League Table from legislation and placing them in government guidance.
The formal consultation will run for twelve weeks, with the Government planning to amend the legislation for CRC by April 2013.