Barker noted the CRC must be simplified

April 13, 2011 - PRLog -- A government report published last week highlighted the lack of popularity of the Carbon Reduction Commitment (CRC) energy efficiency scheme among organizations registered with it. The report has its origin in a conference held on 3 March to discuss ways of reforming the CRC energy efficiency scheme, where more than 200 CRC-regulated organisations attended to discuss reform options proposed by the energy and climate change department (DECC).

The conference was introduced by climate change minister Greg Barker, who said the CRC energy efficiency scheme had already helped put energy efficiency on the boardroom agenda. He said there are many examples of improvements, such as organisations that had fitted automatic meter readers (AMRs), which paid for themselves in three months.

However, Barker noted the CRC energy efficiency scheme was too complex and must be simplified. Several large trade associations including the British Retail Consortium and the manufacturers’ organisation EEF called on DECC to replace the CRC energy efficiency scheme and its performance league table with the climate change levy and mandatory carbon reporting. Mr Barker said it is important that a simplified CRC takes account of changes to the wider regulatory landscape including the possibility of mandatory carbon reporting.

The conference saw a wide range of comments on the many simplification options, and also gave a clear message on reforming the design of the CRC’s carbon emissions trading phase. Although, auctioning of allowances under a cap and trade scheme is due to start in 2014/15, delegates showed a clear preference to move away from cap and trade, which is considered to be too complex.

One of the changes proposed affects the rules the way companies work out how the CRC energy efficiency scheme applies to corporate structures. Currently, for a firm that is a subsidiary of a parent firm, qualification for the CRC brings in the entire group to the highest UK level. Parent groups can register some large subsidiaries separately. Some participants complain that the rules cause problems for foreign-owned groups which have to nominate a UK subsidiary to manage the CRC. Complex corporate structures such as joint ventures have also struggled with the rules.

DECC proposed a variety of simplification options each of which won support from delegates. But, the most popular seems to be retaining the current rules with extra flexibility for subsidiaries to directly participate in the CRC.

DECC said it intends to publish a consultation on proposals to reform the CRC before the end of the 2011.

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