- Auditel Consultant:
- Nick Beaumont-Jones
Carbon Reduction Commitment Scheme becomes “Stealth Tax”
21 Oct 2010 | Filed under: Compliance, CRC, Efficiency savings, Industry CommentMy thanks to fellow Auditel consultant Dr Simon Hooper ( http://auditelconsultants.co.uk/simonhooper/ ) whose recent blog I unashamedly copy here:
The BBC has reported that the CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) has been changed in yesterday’s government spending review. According to the BBC report the government is being accused imposing a “green stealth tax” on companies.
The CRC scheme, which started operating in April this year, was intended to be a carbon emissions trading scheme whereby large energy users would be compelled to purchase allowances for each tonne of CO2 they emitted and the allowance revenue raised would be paid back to the participating companies in proportion to their energy efficiency performance. Scheme participants were to be ranked in a “league table” with those achieving the greatest energy savings receiving the largest payback. As a result, companies participating would either receive a bonus or penalty depending on their position in the “league table”. According to the Environment Agency website the cost savings achieved through reduced energy bills should exceed the cost of participation.
However, the BBC report indicates that the funds raised by the allowances will not now be given back to those who cut their bills the most and that the government will now simply pocket the money raised instead. It is estimated that the CRC will raise £1bn a year.
A statement on the Environment Agency website states that changes to the CRC Energy Efficiency Scheme have been announced as part of the Government’s Spending Review and that they can provide no further information on these changes at this time.
They say that they will be working with the Government to understand the implications of these changes and will provide further information as it becomes available.
Paragraph 2.108 of the Government’s Spending Review document states:
The CRC Energy Efficiency scheme will be simplified to reduce the burden on businesses,
with the first allowance sales for 2011-12 emissions now taking place in 2012 rather than 2011.
Revenues from allowance sales totalling £1 billion a year by 2014-15 will be used to support the
public finances, including spending on the environment, rather than recycled to participants.
Further decisions on allowance sales are a matter for the Budget process.
Industry Tags: CRC, Energy, Energy Efficiency, Environment Agency, Government Spending Review
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Excellent write-up. I really could not have detailed this better. I am not sure if all people will agree with you, but it really probably doesn’t matter. Carry on the great work.