3 days left to comment on draft regulations for the allocation of CRC allowances

On 10 February 2012, the consultation on the updated version of the draft CRC Energy Efficiency Scheme (“CRC”) Allocation Regulations expires.
This consultation impacts on all those who are presently participants in the first phase of the Scheme and must surrender allowances per tonne of carbon for the first time this year, the draft Regulations implement changes arising out of earlier simplifications of the CRC and include the allowance price of £12 for 2012. The Government has stated that future prices are a matter for the Budget process.

The exact dates of the proposed allocation periods are contained in the draft Regulations and are set out in the table below. Two allocation periods are provided for: 1) an annual Government sale (known as the primary allocation period); and 2) an opportunity for the Environment Agency to finalise the processing of late requests (known as the secondary allocation period). Account holders must make a request for allowances in the primary allocation period and multiple requests are possible. Payment must be made no later than the last day of the allocation period. However, there is no general ability to request allocations in the secondary period. The only time secondary period requests are permitted is where the request is for a special allocation following receipt of a notice of a civil penalty requiring allowances to be acquired.

The Government has removed the previously proposed safety mechanism which allowed the sale of further allowances following the initial sale period.

The primary and secondary allocation periods proposed for the next three years are as follows:-

Period 2012/13 2013/14 2014/15
Primary allocation 1 June 2012 – (last working day) 31 July 2012 3 June 2013 – (last working day) 31 July 2013 2 June 2014 – (last working day) 31 July 2014
Secondary allocation 13 August – (last working day)  28 September 2012 12 August – (last working day) 30 September 2013 11 August – (last working day) 30 September 2014

The new Allocation Regulations will need to be in place by 1st April 2012.  Participants should therefore start assuming that the first primary allocation period will start on 1st June 2012 and begin to plan accordingly.  Those who miss the primary allocation period will otherwise generally only be able to buy allowances on the secondary market.

Separate consultation on further changes to the CRC following public dialogue last year is expected shortly.

A copy of the draft Allocation Regulations can be found at http://bit.ly/reOhoC

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