In its Autumn Statement (93-page / 2.70MB PDF) the Government reiterated its plan to simplify the CRC but gave no further details of how that would happen. It has said however that it will scrap the performance league table associated with the CRC.
The CRC is a mandatory scheme aimed at improving energy efficiency and cutting CO2 emissions in large public and private sector organisations that are not caught by the EU Emissions Trading Scheme (EU ETS). CRC participants must measure and report on their emissions, and purchase allowances to cover these emissions.
The CRC has been criticized for being costly for businesses to comply with and administratively complex, and for being a revenue-raising exercise with little connection to energy demand reduction. Business lobby group the Confederation of British Industry (CBI) published a report earlier this year in which it urged the Government to scrap the CRC scheme.
"The Government will simplify the CRC energy efficiency scheme from 2013 and the Performance League Table will be abolished," the Government's Autumn Statement said. "The Department of Energy and Climate Change will publish details of these simplifications. The tax element of the CRC introduced at Spending Review 2010 will be a high priority for removal when the public finances allow"
Environment law expert Linda Fletcher said that business would be "disappointed" with the lack of detail on what the simplification would involve because the consultation on these issues closed on 18 June and businesses expected the details to be announced today. She also said that the abolition of the performance league table would not greatly assist business who would still have to comply with the remainder of the CRC requirements.
"The April 2013 date for simplification and the 2016 further review deadline for the scheme will be seen by many as being too far in the future and this will continue to create uncertainty, as will the promise that the tax element will be removed when public finances allow." said Fletcher.
Fletcher said that businesses may be interested in a consultation launched at the end of November alongside the publication of the Energy Bill. The consultation will look at ways to reduce electricity demand and whether financial incentives could help reduce consumption.
"Business does need certainty and not further and continued consultation but if there is scope for linking a form of incentive or tax rebate to reductions achieved then this is likely to be a much preferred, and ultimately more effective, scheme," she said.