DECC launches final efforts to simplify CRC

30th March 2012


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Participants of the Carbon Reduction Commitment Energy Efficiency scheme (CRC) would complete fewer reports and not have to buy allowances for sites covered by other emissions trading schemes, under DECC's latest proposals to simplify the scheme

Following the chancellor’s Budget pledge to scrap the CRC if the administrative burdens on participants couldn’t be reduced, DECC has launched a consultation outlining potential amendments to the scheme’s registration criteria, reporting requirements and allowance sales.

The proposals are, in the main, the same as those announced eight months ago by energy minister Greg Barker and include reducing the number of fuel types that participants have to report on from 29 to four, scrapping the “cap” element of the scheme and allowing large organisations to report as individual units rather than groups.

Other suggestions to streamline the system include removing footprint reports from the qualification requirements, instead relying only on data from half-hourly meters, and the removal of electricity generating credits.

A number of changes are suggested to take into account the UK and EU’s broader approach to energy efficiency and reducing greenhouse-gas (GHG) emissions, including aligning its GHG reporting requirements with that of Defra, and no longer requiring sites covered by the EU emissions trading scheme or a climate change agreement to buy CRC allowances.

The proposals, according to DECC, will cut the administration costs of participating in the scheme by almost two-thirds, saving organisations £330 million by 2030.

“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,” announced the energy secretary Ed Davey in launching the consultation on Tuesday (27 March).

However, reaction to DECC’s proposals has not been positive with the manufacturing organisation, the EEF, reiterating its calls for the scheme to be abolished. “[The CRC] is costly and no amount of tinkering with it will ever make it work,” argued Gareth Stace, head of climate and environment.

David Symons, director of WSP Environment & Energy, commented: "Instead of tinkering with CRC rules … the government would do better to really focus on how it can help and encourage businesses to reduce their energy bills.”

A survey of CRC participants released by accountants KPMG this week reveals that the total administrative costs the first year of the scheme reached £97 million, costing participants on average £15,500 and adding 5% to the cost of carbon.

The consultation, which will run until 18 June, was launched as Defra confirmed that ministers had not yet come to a decision as to whether to introduce mandatory GHG reporting for businesses, an initiative which a number of organisation, including the EEF and the CBI, would like to see replace the CRC.

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