The government has set out new business energy efficiency policy proposals to simplify and improve corporate carbon taxation schemes with a view to decarbonising the economy and ensuring secure energy supplies.
These changes have been brought about as the government has ruled that there is a significant amount of cost-effective energy and carbon saving potential not currently being realised, in business sectors.
The official line is that ‘encouraging the uptake of energy efficiency and low carbon measures will play a crucial role in the government’s strategy for meeting ambitions around productivity, growth, security of energy supply and decarbonisation.’
The proposal will see a complete overhaul of green policies that businesses currently have to comply with after complaints over the complexity of current policies and the administration implications.
Changes will be made to Climate Change Levy (CCL) and Carbon Reduction Commitment Energy Efficiency Scheme (CRC) taxes, the Climate Change Agreements (CCA) and Enhanced Capital Allowance (ECA) system of tax breaks, the mandatory greenhouse gas (GHG) reporting and Energy Saving Opportunity Scheme (ESOS) reporting schemes, and the Electricity Demand Reduction (EDR) pilot incentive scheme.
There are plans to abolish the CRC (Carbon Reduction Commitment), the scheme in which large energy users are required to buy allowances for every tonne of carbon they emit. This has proved unpopular throughout by businesses due to its complexity and for diverting resources away from on-the-ground delivery of energy efficiency improvements.
The UK Green Building Council has responded to the news as follows:
“Moving to a position where organisations are faced with just one key reporting scheme should help to free up organisations’ resources and allow them to focus on delivering energy savings, rather than administration. Likewise, rationalising the tax regime could provide a clearer spur for action, and help to kick-start commercial retrofit activity after a few relatively flat years.
“But neither of these things will, alone, drive the scale of change that we need to reduce emissions from our buildings. To do that, we need new incentives that significantly strengthen the case for businesses to not only identify energy saving opportunities but put them into action, and so it’s encouraging to hear that Government is open to new ideas in this area, especially in the light of recent cuts to support for renewables.”
The government is now in consultation period until November, allowing those affected to comment on the proposals. Changes are not expected to be implemented until 2017.
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