Carbon Reduction Committment to be simplified

After the roasting given by the Chancellor, Mr. George Osborne in the recent Budget, the Secretary of State for the Department of Energy and Climate Change (DECC) Mr. Edward Davey as given a statement on the future of the Carbon Reduction Commitment Energy Efficiency Scheme(CRC) as follows:

“We have listened to businesses’ concerns about the CRC and have set out proposals to radically cut down on ‘red tape’ to save businesses money”.

The CRC is a mandatory United Kingdom-wide trading scheme covering large business and public sector organisation, who produce 12% of UK carbon emissions. It requires businesses to report on and pay a tax on energy used, and ranks businesses in a performance league table which provides a further reputation incentives to improve their energy efficiency. The CRC is anticipated to deliver carbon savings of 21 MtCO2 by 2027.

However, it has been largely criticised for the over complex and bureaucratic mechanisms that are used for reporting and its is estimated that the revised requirements will reduce administrative costs by almost two-thirds, equating to around £330 million of savings up to 2030.

Businesses is expected to support a simplification of the scheme and, now, has an opportunity to comment on Government’s proposals for a package aimed at retaining the energy-saving and reputation benefits of the CRC, whilst reducing the bureaucracy.

The benefits of the scheme are clear though. It will deliver substantial carbon savings helping us to meet carbon budgets, and it encourages businesses to take action to improve their energy efficiency”.

The simplification package will include:

  • A shortening of the CRC qualification process.
  • Reducing the number of fuels covered by CRC from 29 to 4.
  • Reducing the amount of reporting required by businesses.
  • Reducing the length of time participants will have to keep records.
  • Removing the requirement on facilities covered by Climate Change Agreement or EU Emissions Trading System installations to purchase CRC allowances.
  • Adopting new emissions factors for the CRC which will align it with Greenhouse Gas reporting processes.
  • Removing the detailed metrics of the Performance League Table from legislation and placing them in government guidance.

The formal consultation will run for the next twelve weeks from 27 March 2012 with the expectation of an amendment to the legislation for CRC by April 2013.

Further information and an opportunity to comment on the amendment proposals can be found at

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