DECC outlines plans to simplify CRC

11th December 2012


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Participants in the Carbon Reduction Commitment Energy Efficiency (CRC) scheme will only have to report emissions from electricity and gas use from 2013, confirms DECC

The government has published its plans to simplify the CRC, including scrapping the cap on emissions from the second phase of the scheme, reducing the number of fuels that participants must report on and removing the need for sites covered by the EU emissions trading scheme (ETS) or a climate change agreement to buy allowances.

The energy department claims that the measures, which closely follow those consulted on in March, will cut the costs of administering the scheme by 55% for participants – amounting to total savings of £272 million by 2030.

“We have listened to the concerns of business and radically simplified the scheme in order to cut down on administrative costs and red tape,” said energy minister Greg Barker in announcing the changes. “The scheme will now be more flexible and light-touch, saving participants money and helping them to save energy.”

The changes will, for the most part, be implemented from the start of the phase two of the scheme – the registration year for which is 2013/14, with the first reporting year being 2014/15.

Participants in the second phase will no longer have a cap imposed on their emissions and there will be no auction of CRC allowances, which will be sold at fixed prices twice a year. The CRC qualification rules have also been streamlined, removing the greenhouse-gas reporting element, and large organisations will be able to report under the scheme as individual business units, rather than as a whole.

Several of the changes, including the scrapping of the performance league table and the reduction in the number of fuels covered by the scheme, will come into force in 2013. The government document mistakenly includes 1 April 2013 as the start date for these changes, but DECC has confirmed to the environmentalist that they actually will take effect from 1 June 2013.

In its plans, DECC confirms that 27 of the 29 fuels currently covered by the scheme, will be removed from next year. As a result, participants will only have to report on electricity and gas used for heating purposes – however there will be an assumption that all gas consumed by participants is for heating purposes, unless an organisation demonstrates that is not the case.

Next year will also see the introduction of a minimum threshold for gas use, meaning that only participants with an annual gas consumption equal to, or more than, 2% of their electricity use, will be required to report on their gas use.

This assessment will be made only once a phase, DECC confirms. So if in 2012/13 a participant’s gas consumption is below 2%, they will not have to report on gas or purchase allowances for that energy use for the last two years of phase one.

Another amendment to be implemented from 2013 is the exemption of very long conveyor belts from the scheme. Earlier this year, mining company ATH Resources lost a legal bid to have electricity consumed by a 12km conveyor transporting coal at one of its sites exempted from the CRC.

In April, energy secretary Ed Davey rejected the firm’s argument that the conveyor should be exempted as transport. However, DECC has now confirmed that government considers “extra long conveyor belts that transport materials between a CRC participant site and an offsite facility for onward transport – which is intended to reduce road haulage ... to be a form of transport within the intended meaning of the CRC scheme”.

ATH Resources went into administration this week.

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