In a recent announcement, the Government set out a number of proposals to further reform the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.
The changes have been brought forward in response to criticisms that the scheme is too complex and overlaps with other policies. But it refused to scrap the scheme entirely and instead claimed the changes proposed will "simplify" and "streamline" the scheme.
The CRC, which was launched in April last year, was designed to incentivise businesses that use more than 6,000MWh of electricity per year (equivalent to an annual electricity bill of about £500,000) to undertake energy efficiency upgrades.
Back to the drawing board
Climate change minister Greg Barker said the revised scheme aims to reduce red tape for businesses, while improving the clarity for how businesses need to comply.
The proposals would also provide greater flexibility on how companies participate in the scheme and reduce overlap with other climate change policies such as EU Emissions Trading Scheme (ETS) and Climate Change Agreements (CCAs).
Under the new proposals, rather than having to report on emission from 29 different fuels, businesses will be required to report on just four (electricity, gas, kerosene and diesel).
These four fuels account for around 95% of emissions included in the scheme. The proposals would also see the next phase of the scheme begin with two fixed-price allowance sales a year, rather than auctions.
In a bid to simplify the qualification criteria, sites that already participate in the EU ETS or have CCAs would be automatically exempt and would not have to report or surrender allowances under the CRC.
In addition the qualification rules will be simplified to focus on settled half-hourly meters, which will exclude a number of smaller organisations from the scheme.
But the Government said it recognised this would reduce the overall emissions coverage of the scheme, so there is potential for the current qualification threshold to be revisited. More details on this are expected later this month.
The organisational rules of the scheme will also be changed. At the start of each phase parent companies will notify the Environment Agency of the overall structure of their group.
The group will have the option to report as separate business units, which is hoped to make monitoring and reporting easier.
Too little, too late
Despite the changes business lobbyist the CBI said it was disappointed with the Government’s proposed reform of the scheme.
“While it is right to recognise that there are problems with the CRC in its current form, the Government’s proposals amount to tinkering around the edges […] It should either reinstate the revenue-recycling element, or scrap the CRC altogether”.
The proposals will be put out to consultation early next year before any final alterations are made. But the Government would like to hear participants’ views on the initial proposals before 2 September.
Source : The Informer
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