27 Mar 2012

DECC cuts red tape for carbon reduction scheme

The government has issued ambitious new proposals which it claims will simplify the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) and save participating businesses millions of pounds

The move comes in response to businesses’ concerns about the scheme which they regarded as cumbersome and expensive.

Reforming CRC came up as a high priority in the consultation the Department of Energy and Climate Change (DECC) held about the Red Tape Challenge.

According to Energy secretary Ed Davey, the proposals will cut businesses’ administration costs by almost two thirds, the equivalent of £330m worth of savings up to 2030.

CRC covers large business and public sector organisations which typically spend more than £0.75m a year on electricity and requires them to report on and pay a tax on energy consumed. As an added incentive to reduce energy consumption, it also ranks them in a performance league table.

The government has said the new proposals will:
• Shorten the CRC qualification process
• Reduce the number of fuels covered by CRC from 29 to four
• Reduce the amount of reporting required by businesses
• Reduce the length of time participants will have to keep records
• Remove the requirement on facilities covered by climate change agreement or EU emissions trading system installations to purchase CRC allowances
• Adopt new emissions factors for the CRC which will align it with greenhouse gas reporting processes
• Remove the detailed metrics of the league table from legislation and place them in government guidance.

The DECC would like to hear comments on the proposals from interested parties. The deadline is 18 June and responses should be sent by email to


Julia Irvine