Changes to CRC scheme will save UK businesses £272 million

Posted at December 12, 2012 » By : » Categories : News » Comments Off on Changes to CRC scheme will save UK businesses £272 million

The UK government’s plans to simplify the Carbon Reduction Commitment (CRC) efficiency scheme will save businesses £272 million, says Energy Minister Greg Barker.

In a statement yesterday, Barker said the government has received over 250 responses to its proposals to scale back the controversial scheme, which requires energy users over a certain threshold to monitor and report on their carbon emissions.

The scheme has drawn criticism for being over complex and as a ‘stealth’ carbon tax, after the recirculating element of the scheme was changed in favour of the Treasury keeping the revenues.

Now, however, a simplification package will “radically reduce” the administrative costs to participants by over half (55%), says Barker.

The measures also include reducing the number of fuels that participants are required to report on from 29 to just electricity and gas, as well as introducing the assumption that all gas used is for heating. Meanwhile, a new 2% threshold on minimum gas use will protect those organisations that use very little gas.

The plans also confirm the Chancellor George Osborne’s promise in his Autumn Statement to do away with the League Table, which ranked participants in the scheme by their improvement in energy efficiency.

“Participants’ aggregated energy use and emissions data will continue to be made public annually in line with the government’s transparency agenda, which will ensure that CRC participants’ energy efficiency behaviour remains visible,” explains Barker.

Other changes will include removing state-funded schools from the scheme and reducing the overlap with other climate change legislation.

The changes will be implemented for the last two years of Phase One of the scheme (2012-13 and 2013-14), before the government undertakes a major review of the effectiveness of the scheme in 2016.

“Energy efficiency increases productivity and is good for growth so it is important that we continue to incentivise this through the CRC,” adds Barker. “[But] we have listened to the concerns of business and radically simplified the scheme in order to cut down on administrative costs and red tape. And we will consider how to encourage new renewable on-site generation through the CRC scheme.”

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Related stories:
UK government ditches CRC ranking in Autumn Statement (6-Dec)
UK government promises simplification of CRC efficiency scheme (28-Mar)
UK Spending Review makes major change to CRC scheme (22-Oct 2010)

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