Updated: Business leaders urge government to overhaul energy efficiency policies

29th August 2013

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Government initiatives aimed at encouraging organisations to cut energy use are failing because they are "bureaucratic, complex and costly", says the CBI

The UK business body has called on the government to review its approach to energy efficiency, arguing that companies are missing out on the economic and business benefits of saving energy due to a lack of awareness, difficulties in accessing finance and incoherent policies.

A survey of 100 CBI member organisations found that, while 80% agree energy efficiency is a high priority, just 5% believe government policies, such as the carbon reduction commitment (CRC), the green deal and climate change agreements, are encouraging firms to curb energy consumption.

“Businesses are frustrated with the tangle of overlapping policies that are bureaucratic, complex and costly,” commented Rhian Kelly, CBI’s director for business environment policy. “The government should assess all energy efficiency policies that affect business and come up with a simpler approach, where any new initiatives truly add value.”

Decc’s Energy Efficiency Deployment Office, which was launched in early 2012, must do more to ensure the CRC and the climate change levy and other policies are “joined up”, particularly when it comes to reporting requirements, concludes the CBI. “Some firms have to report their energy use and emissions in different ways under different schemes,” said Kelly.

The body also urges the government to do more to help firms finance energy-efficiency measures, highlighting in particular the need for action to develop the non-domestic green deal – which has stalled due to a lack of funds – and for clearer policies on combined heat and power (CHP) to help energy intensive firms make the longer-term business case for investing in CHP.

Other recommendations to government include: simplifying the enhanced capital allowance regime and waiving business rates for those refurbishing empty properties to improve their energy efficiency.

A separate report for Decc on decarbonising heat in industrial processes finds that CHP could play a key role in reducing CO2 emissions in the short term.

The report, which examined evidence of potential carbon savings in several industrial sectors, found that the most significant opportunities for decarbonisation through CHP were in the food and drink industry.

Carbon capture and storage technologies, meanwhile, will be important for reducing CO2 from cement plants and refineries, while switching from fossil fuels to biogas and syngas provide the best opportunities for firms in the ceramics- and glass-making industries.

In the September 2013 issue of the environmentalist, Paul Suff will examine the different options available to firms wanting to finance energy efficiency measures.

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