News story

CRC simplified to save businesses millions of pounds

The CRC Energy Efficiency Scheme (CRC) will be dramatically simplified in order to save participating businesses and public sector organisations…

From:
Department of Energy & Climate Change and The Rt Hon Gregory Barker
Published
10 December 2012
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The CRC Energy Efficiency Scheme (CRC) will be dramatically simplified in order to save participating businesses and public sector organisations millions of pounds in administrative costs.

The reforms to the scheme were announced in the Chancellor’s Autumn Statement and will deliver a 55% reduction in costs, saving around £272 million for participants:

  • The Government will simplify the CRC from 2013 and the Performance League Table will be abolished.
  • The Government will review the effectiveness of the CRC in 2016. This review will consider whether the CRC remains the appropriate policy to meet industrial energy efficiency and carbon reduction objectives, and will consider alternative approaches that could achieve the same objectives. The tax element of the CRC introduced at Spending Review 2010 will be a high priority for removal when the public finances allow.

The simplification of the scheme will make it easier for businesses to feel the benefits of using less energy, and will also support jobs in the energy savings industry through further incentivising demand for energy efficient products and services.

Minister of State Gregory Barker said:

“Energy efficiency increases productivity and is good for growth so it is important that we continue to incentivise this through the CRC.

“We have listened to the concerns of business and radically simplified the scheme in order to cut down on administrative costs and red tape. And we will consider how to encourage new renewable on-site generation through the CRC scheme.

“The scheme will now be more flexible and light-touch, saving participants money and helping them to save energy”.

Reforms to the CRC Energy Efficiency Scheme include:

  • Reducing the number of fuels that participants have to report against from 29 to 2 (electricity and gas for heating).
  • Reducing scheme complexity by removing the 90% rule and Climate Change Agreements (CCA) exemption rule.
  • Abolishing the Performance League Table but continuing to publish participants aggregated energy use and emission data.
  • Reducing overlap with other climate change legislation.
  • Withdrawing all state-funded schools in England from the scheme.
  • Government will consider how the CRC can incentivise the uptake of new onsite renewable self-supplied electricity.

Notes for editors

  1. The CRC Energy Efficiency Scheme (CRC) is a mandatory UK-wide trading scheme that was brought into law in 2010.
  2. The scheme will be reviewed again by the Government in 2016.
  3. CRC is designed to incentivise large public and private sector organisations to take up cost-effective energy efficiency opportunities.
  4. The Government response relates to a consultation undertaken from 27 March - 18 June 2012.
  5. The consultation document sets out 46 proposals which aimed to streamline and simplify the scheme. A total of 255 responses were received. See the Consultation on a simplified CRC Energy Efficiency Scheme web page.
  6. A final Impact Assessment has been published with today’s response. See the Consultation on a simplified CRC Energy Efficiency Scheme web page.
  7. The order to amend the CRC scheme will come into force on 1st June 2013, subject to Parliamentary approval.
     
Published 10 December 2012