Updated: DECC outlines simplified carbon reduction scheme

13th January 2013


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Plans to simplify the carbon reduction commitment (CRC) energy efficiency scheme will save participates a total of £272 million by 2030, claims DECC

Confirming the changes to the scheme first mooted by the chancellor in his autumn statement, the energy and climate change department says its simplification of the CRC will make it easier for businesses to feel the benefits of using less energy and will support jobs in the energy savings industry through further incentivising demand for energy efficient products and services.

“We have listened to the concerns of business and radically simplified the scheme to cut administrative costs and red tape,” said energy minister Greg Barker.

Changes include abolishing the performance league table (PLT); cutting the number of fuels that participants have to report on from 29 to two; removing the rule that at least 90% of emissions are regulated; reducing overlap with other climate change legislation, such as that governing climate change agreements and the EU emissions trading scheme; and extending the annual allowance surrender date to October.

The changes will, for the most part, be implemented from the start of phase II of the scheme, in April 2014. Several of the changes, including the scrapping of the PLT and the reduction in the number of fuels covered by the scheme, will come into force from 1 June 2013, however.

The manufacturing body, the EEF, which has campaigned to have the CRC abolished, maintains that the changes do not go far enough.

“There is still far too much duplication with other schemes designed to reduce emissions and improve energy efficiency,” said head of climate and environment policy Gareth Stace.

Although the overall savings are estimated up to 2030, the government says it will review the CRC again in 2016 to see whether the scheme remains the best way of improving energy efficiency and reducing carbon emissions.

The CRC administrator, the Environment Agency, has confirmed to the environmentalist that the final PLT, covering 2011/12, will be published shortly. A spokesperson said at the start of January that the data was being verified and that the agency expected to release the table in the early part of the year.

Main changes to the CRC from June 2013

  • Abolition of the performance league table – though participants’ aggregated energy use and emission data will continue to be published.
  • The reduction in fuels from 29 to two, so the scheme only covers emissions generated from the consumption of electricity and gas (for heating).
  • Introduction of an organisation-wide 2% minimum threshold for gas. So, if a participant’s gas consumption in 2012/13 is below 2% then it will not have to report on that fuel for the last two years of phase I or purchase allowances.
  • The extension of the CRC allowance surrender deadline from the end of July to the end of October.
  • Restrictions on the circumstances where electricity generating credits can be claimed (from April 2013).

Main changes to from April 2014

  • Restriction of qualification criteria to supplies settled through half-hourly meters. Threshold held at 6,000MWh.
  • Change definition of supply rules so responsibility for the CRC rests with the organisation with direct control for fuel.
  • Removal of 90% rule and associated compliance activities.
  • Removal of CRC supply rules from installations covered by the EU emissions trading scheme and facilities covered by climate change agreements (CCAs). Remove three CCA exemptions.
  • Introduction of two, fixed-price allowance sales.
  • Expansion of unmetered supplies.
  • Abolition of electricity generating credits.
  • Extension of disaggregation provisions.
  • Alignment of emission factors with those used for greenhouse-gas reporting.

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