Businesses see benefits from review of energy efficiency

29th July 2015

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Wendy Bowman

Business groups have welcomed the government's review of energy efficiency policies and taxes announced in the summer budget.

The review will consider the carbon reduction commitment energy efficiency scheme (CRC), the climate change levy (CCL) and climate change agreements (CCAs), and how they interact with other business energy efficiency policies and regulations. The CBI and manufacturers' trade body EEF are among business groups that called for the review.

Richard Warren, senior energy and environment policy adviser at EEF, said the organisation backed simplification. "The CRC is a fairly complex tax. It's not necessarily delivering what it was designed to do." Improvements in energy efficiency are not the primary aim of the review, which is being carried out by the Treasury.

"It's number one objective is that the revenue stream is intact," Warren said. CCLs generate around £800 million a year for the exchequer, while the CRC is worth some £900 million, he said. EEF would like new policies to be cost-neutral for business. The way the Treasury chooses to consolidate revenue streams from the current policies will be more expensive for some companies and less for others, Warren said.

Meanwhile, the CBI wants the review to consider the support given to energy-intensive industries, including current compensation packages and exemptions.

A report published by the energy and climate department (Decc) in July revealed that, although the CRC had driven energy efficiency investments in 56% of businesses, around half of CRC participants felt the scheme was not delivered efficiently or consistently. Businesses supported the creation of more consistent policy, but the report revealed a variety of opinions on how this should be done.


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