12 Weeks to save Carbon Reduction Commitment

Energy secretary Ed Davey has claimed that new proposals to simplify the Carbon Reduction Commitment (CRC) and cut red tape will save businesses millions - as he tries to save the unpopular scheme.

Launching a 12-week consultation on 27th March, against a backdrop of business despondency, Mr Davey said "we have listened to businesses' concerns about the CRC and have set out proposals to radically cut down on 'red tape' to save businesses money".

This follows an announcement made in last week's Budget announcement that the CRC would be scrapped and replaced with a less cumbersome green tax system - if it government failed to simplify it within six months.

Under the changes, DECC says that businesses will see their administrative costs cut by almost two-thirds, resulting in savings of about £330m up to 2030.

However, many large businesses say they would rather see the complex mandatory trading scheme scrapped altogether and replaced with a new system.

Director of Energy Solutions, Nick Grogan said: "With energy costs likely to continue climbing, the Government should be doing more to help businesses become more efficient, not punishing them with what is in reality just another tax."

"They would do better to encourage companies to use CRC as an opportunity to cut costs and use the money raised to fund new initiatives such as The Green Deal."

Mr Davey said: "The benefits of the scheme are clear though. It will deliver substantial carbon savings helping us to meet carbon budgets, and it encourages businesses to take action to improve their energy efficiency"., the consultation includes proposals to reduce the amount of reporting required by businesses and the length of time participants will need to keep records.

Key proposals for the simplification package include: a shortening of the CRC qualification process and a reduction in the amount of reporting required by businesses.

The consultation is set to run for 12 weeks from 27th March and businesses are invited to comment on the proposals. Following on from this legislation for CRC will be amended by April 2013.