Industry NewsThe Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is being streamlined to make the project more effective and address business concerns over its complexity. The details of these changes have been revealed by the Department for Energy and Climate Change (DECC). The changes being proposed now by DECC are aimed to limit the administrational burden of the CRC. They could also see less businesses impacted by the project. The Government will now consult on these proposals for introduction in 2013.
The CRC came into force in April 2010 and affected most half-hourly metered businesses. It is mandatory and requires participants to buy credits to cover their carbon footprint. The cost of the credits would provide an incentive to reduce energy usage. Previously, there had been scope for the better performing businesses to receive a reward recycled from the carbon payments. This has now been removed, making many businesses that the CRC has been turned into a overly-complex carbon tax. Government has consulted with affected businesses and while it has not cancelled the scheme, it does appear to be suggesting changes that reduce the burden of CRC.
Among the changes proposed are a sharp drop in the number of fuels businesses will have to report on. From 29, they would only have to report on four. In addition, the carbon credits will not be auctioned, but sold at a fixed price. Finally, all businesses under a Climate Change Agreement, as well as those in the ETS, would be exempt.
Commenting on the proposals, Climate Change Minister Greg Barker said, "Businesses have made clear to me their serious concerns about the overly complex and bureaucratic CRC scheme. We've got to help business reduce their emissions, not strangle them in red tape." He added, "I believe the principle of the scheme is right which is why I am proposing to make the CRC simpler while still protecting its strong environmental integrity to cut emissions in large organisations and businesses. Energy efficiency is a no brainer. It saves money and cuts carbon."