UK government ditches CRC ranking in Autumn Statement

Posted at December 9, 2012 » By : » Categories : News » Comments Off on UK government ditches CRC ranking in Autumn Statement

UK government plans to rank businesses according to their performance on energy efficiency has been ditched by Chancellor George Osborne in his Autumn Statement.

Osborne has promised a simplification of the much-maligned Carbon Reduction Commitment (CRC) energy efficiency scheme, which requires businesses using over a certain threshold of energy to monitor and report their carbon emissions, or a replacement with a simpler green tax system.

Originally, the initiative was planned to rank participating companies annually in a Performance League Table on the basis of their improvement in energy efficiency, with the best performers being rewarded and the worst penalised.

The first annual league table published last year was criticised by businesses for only taking into account actions of the course of the previous year and not previous carbon reduction activities undertaken by companies.

But now, the Chancellor is ditching the Performance League Table and simplifying the scheme from April next year.

Critics of the scheme say that the latest changes confirm the transformation of the CRC into a carbon tax.

“While not unexpected, the abolition of the CRC League Table is a strong step that confirms the Government is turning the CRC into a tax. It will be interesting to see how the ‘significant’ administrative savings that the Chancellor announced in his Autumn Statement will be measured,” says Caroline Pitt, director of carbon services at energy specialists Utilyx.

In addition, the Chancellor’s promised review of the scheme in 2016 brings yet more uncertainty to businesses over the future of the CRC. This review could, according to the Treasury, remove the tax element of the scheme when public finances allow.

But business lobby group the CBI, while welcoming the changes, cautioned that they do not go far enough.

“We need a firm commitment now to scrap the scheme when public finances allow, and to replace it with a more coherent approach to business energy efficiency,” said director-general John Cridland in a statement.

The Institute of Environmental Management and Assessment (IEMA), echoes that position with its statement:
“We still urgently need a long term, consistent policy framework to provide businesses with the confidence to invest in low carbon and energy efficient improvements. A further review in 2016 undermines this.”

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Related stories:
UK Chancellor’s Autumn Statement confirms a ‘dash for gas’ (6-Dec)
UK government promises simplification of CRC efficiency scheme (28-Mar)
Changes to CRC have scaled back UK businesses’ efficiency plans (18-Jul 2011)
UK Spending Review makes major change to CRC scheme (22-Oct 2010)

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