CRC simplified to save businesses millions- Ed Davey

Millions of pounds will be saved for businesses through ambitious new proposals to simplify the Carbon Reduction Commitment Energy Efficiency Scheme, (CRC).

Participants will see their administrative costs cut by almost two-thirds, equating to around £330 million of savings up to 2030.

The 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.

The CRC is expected to deliver carbon savings of 21 MtCO2 by 2027.

Businesses support the simplification of the scheme, and will now have the opportunity to comment on Government's proposals.

The package proposed is aimed at retaining the energy-saving and reputational benefits of the CRC, whilst reducing the bureaucracy of taking part.

Liberal Democrat Secretary of State Edward 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".

The simplification 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 runs for twelve weeks from March 27th. Following on from this, Government will amend the legislation for CRC by April 2013.

Notes-

1. Consultation on a simplified CRC Energy Efficiency Scheme
2. The CRC covers large organisations in the public and private sector with at least one half hourly meter settled on the half hourly market who use more than 6,000MWh/annum of half hourly metered electricity qualify. Typically participants spend more than £0.75 million a year on electricity.
3. The expected £330 million savings by 2030 include administrative cost savings of around £250m for business, and savings of over £300m when you include the public sector up to 2030.
4. Reforming the CRC was a high priority for business stakeholders commenting on DECC's regulations in response to the Red Tape Challenge.
5. More information about the CRC can be found on the DECC website.