Change In CRC Scheme Positive for Energy Efficiency

"REVENUE raised from the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme will be used to support the public finances, rather than recycled to participants."

So announced the UK’s Department for Energy and Climate Change (DECC) surprising the countries commerce, industry and the public sectors. The UK Government has now said it now plans to keep revenue raised by the Carbon Reduction Commitment (CRC) scheme, rather than recycle it to participants in the scheme.

The change in the way the scheme works formed part of UK Government’s spending review, which aims to reduce the national debt. The review was generally positive for the energy saving industry.

The CRC scheme, introduced in April. is designed to target the UK’s largest businesses and public sector bodies, forcing them to purchase carbon allowances if they use over 6,000 MWh of electricity per year.

The CRC scheme has now in effect become a carbon tax, with the UK government predicting that they will raise around £3.5 Billion (US$5.5B) over the next four fiscal years from the scheme.
One positive in the scheme change is that it has been made simpler but it has still shocked many who never saw the change coming, but many energy saving experts feel it is a boost to the industry.

UK Climate Minister Greg Barker told BusinessGreen.com, that the changes would increase costs for businesses, but argued that the structure of the CRC meant that "progressive businesses that act to improve  energy efficiency will be able to minimise their exposure"

Price Waterhouse-Coopers carbon policy specialist, Henry Le Fleming, commented that the revised scheme would drive up costs for registered companies, but added:

"The positive aspect of this change is that it provides a strong and clear incentive for companies covered by the scheme to invest in energy efficiency," he said.

Climate Change Capital, an investment management group, also saw the positives for energy efficiency, stating that the change could unlock large quantities of green building investment. Their marketing communications manager, Daniel Cremin said:

"40 per cent of emissions come from the built environment. This is a bold move by the government to rein this in and put the emphasis on businesses,

"There are going to be winners and losers, but it's a double whammy for the environment – encouraging industry to improve the energy efficiency of buildings and getting those that don't to fund it."

Carbon management company Carbon Clear's head of CRC, James Ramsay, also sees positives:

“The CRC is simplified, administration is likely to be more straight-forward....However the scheme is still likely to retain complex monitoring and reporting requirements.

"In terms of its impact, this change will accelerate the take up of energy and carbon reduction measures. Whilst existing participants will welcome simplification of the scheme, these changes leave the door open for government to expand it to other organisations not currently captured," Ramsey concluded.

Thursday 21st October 2010


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