IEMA has today stated its support for the development of a more joined-up approach to policy that includes both carbon reporting and pricing. These and other policy drivers can together provide the incentives required to drive business action to reduce CO2 emissions and achieve cost savings. 75% of IEMA members say that energy and carbon reduction policies can be cost neutral for organisations and lead to financial savings.

As HM Treasury and DECC’s Energy & Carbon Tax review consultation closed today, IEMA published its full response based on Member views on the current and prospective pricing and reporting landscape (available to download from here), Nick Blyth, Policy & Engagement Lead at IEMA said: “Currently there is a gap in the Government’s review of the business energy efficiency tax landscape - clear objectives are needed on how much carbon reduction any new policies will aim to achieve. 90% of IEMA professionals believe that the Government’s current review should maintain and or exceed the same ambitious levels of carbon reductions sought by earlier policies. These carbon reductions are vital to delivering our longer term Carbon commitments and also to enable UK business to compete on the global stage through innovation and in achieving efficiencies and cost savings”.

IEMA supports the goal of effective simplified and non over-lapping energy and carbon regulation that could provide greater clarity and consistency. This should be developed, impact assessed and introduced over a timeline that will minimise the impact on businesses, who have only recently established internal systems to deliver against the current policy landscape.

Business and organisations need a durable policy landscape that provides long term confidence and certainty to inform investment in energy saving, and carbon initiatives that can deliver benefit to the bottom line and to the environment. 94% of IEMA professionals support the need for tax or price signals to be set over at least a 3 year period, and should follow the good example of the landfill tax with its clear timeline,” said Nick Blyth.

Policy mechanisms such as mandatory GHG reporting should stay as they have a key role to play in enabling businesses to measure, manage and therefore reduce their energy consumption and carbon (GHG) emissions.

Mandatory reporting, alongside an effective pricing driver, as has been provided within the CRC, is key to enabling business to invest in energy efficiency measures. The CRC has been effective - supporting business cases for energy efficiency and renewable energy investments. A reformed policy approach could be broadened out to encompass businesses that are currently implementing the new Energy Savings Opportunity Scheme (European Directive transposition). This would be a joined-up approach in policy review and would extend the reach of energy and carbon engagement to around 9,000 businesses.

A joined-up approach to the energy policy landscape is essential in the long-term. The Government’s review provides an opportunity to maximise carbon savings for companies, enabling UK plc to compete on the global stage. By retaining key elements of the existing policy landscape, and reducing overlap, the UK could have an effective policy landscape that supports business leaders to deliver a low carbon future,” said Blyth.

Results from IEMA’s Energy & Carbon Tax Review Survey Consultation.

1. 90% support the proposal that the Government’s review should - as a central objective - seek to increase overall carbon reductions (beyond the combined levels projected for existing policies) and that any future replacement policies must (together) be transparently impact assessed against this principle.

2. 93% support the proposal that for the quoted companies already mandated (around 1,200) Mandatory GHG reporting should be continued within the policy landscape as an important medium term driver for energy and carbon reduction.

3. 92% support the proposal that a level of mandatory reporting, either energy or carbon based, should also be extended to all large organisations (this would cover all organisations that have to comply with ESOS – understood to be about 9,000).

4. 90% support the need for any new reporting requirement on large organisations should be consistent to the energy and transport scope of ESOS (this assumes quoted companies are still under wider Mandatory GHG reporting).

5. 94% support the need for future fiscal driver (price, tax or levy) must be clearly set over a medium term period (at least 3 years but preferably longer).

6. 90% agree that the carbon allowance process within the CRC has been effective in raising the profile of energy and carbon costs. IEMA is concerned that any replacement fiscal drivers (e.g. tax or levy) must also be designed to be effectively ‘visible’.

7. 61% agree that if the CRC is removed, many have proposed that the current CRC allowance price of £16 per tonne should continue to function for companies who were subject to the CRC scheme, and possibly extended further to other large energy users outside of the current scheme.

8. 79% would be in favour of an escalator on either carbon or an energy tax similar to the Landfill Tax as it has been a good example of a fiscal driver that has delivered change.

9. 90% (with the possible exception of Scotland (which has separate arrangements) support the proposed need for a clearer regulatory or ‘duty’ requirement on energy and carbon in the public sector (especially if the CRC is removed).

10. 94% agree that Government initiatives to simplify and remove guidance may be having a detrimental impact. There is a real business benefit in having clear energy and GHG guidance for businesses and for other organisations.

11. 75% have said that Energy and Carbon reduction approaches can be cost neutral for organisations and should lead to financial savings.

12. 90% have said that key drivers for Energy and Carbon Reduction (such as taxes, mandatory reporting or scheme compliance) work most effectively when combined and when made highly visible (and rarely work in isolation as single drivers).


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