Government to consider replacing the Carbon Reduction Commitment (CRC) scheme

The UK government will consider replacing a scheme to cut corporate energy use with an alternative environmental tax if it cannot cut the scheme's administrative costs, George Osborne announced in his budget statement on Wednesday.

The so-called Carbon Reduction Commitment (CRC) was devised under the previous Labour government, and dramatically rewritten in 2010.

The mandatory energy efficiency scheme forces businesses like banks, hotels, hospitals and schools to help cut Britain's greenhouse gas emissions by 4 million tonnes and corporate energy bills by 1 billion pounds a year by 2020.

The CRC has been widely criticised for being too costly, confusing and unfair.

"The Carbon Reduction Commitment is cumbersome, bureaucratic and imposes unnecessary costs on business," Osborne said.

"We will seek major savings on the administrative costs and if that cannot be done we will replace the revenues with an alternative environment tax."

Osborne did not disclose details about the type of environment tax which might be considered.