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Posts Tagged ‘CRC Scheme’
A report surveying businesses by nPower called the Business Energy Index found that there is widespread disquiet among businesses over the CRC scheme.
nPower’s Business Energy Index (nBEI) is conducted on an annual basis and tracks attitudes and opinions towards energy use, energy risk and carbon emissions.
The report also contains evidence showing that 34% of respondents believed that “removal of recycled payments from the scheme has had a negative impact on plans to invest in energy saving measures.” 46% of respondents felt they had not received enough advice and explanation of the details of the scheme from the government on the Carbon Reduction Commitments (CRC) since it was implemented in April 2010.
26% want the scheme scrapped completely, while 52% wanted there to be no more changes to the scheme. 82% required more clarity of what is needed from their business. Over two thirds of businesses believe that the target to reduce emissions by 2050 is unrealistic.
Government proposals unveiled last week (June 30) to simplify the Carbon Reduction Commitment energy efficiency scheme are ‘a move in the right direction’, according to the Environmental Services Association.
But, the trade body for the waste sector said it still had “outstanding concerns” over the “disproportionate” impact that the proposed scheme, which is known as the CRC and will involve businesses buying allowances to cover their carbon emissions, could have on recycling facilities.
Under the CRC, from April 2012 businesses and organisations over a certain size will be expected to purchase allowances from the government to cover their carbon emissions, as well as measuring and reporting their carbon emissions. The initiative aims to reduce carbon emissions from non-energy intensive sectors of industry.
The plans announced by climate change minister Greg Barker aim to reduce the administrative burden of the scheme on businesses, allow greater flexibility for businesses on how they take part and reduce the overlap between the CRCF and other government climate change policies.
Notably, they reduce the number of fuels that businesses must report on emissions from, down from 29 to just four – electricity, gas, kerosene and diesel for heating.
This move in particular was welcomed by the Environmental Services Association, whose director of policy, Matthew Farrow said it would make it easier for obligated waste businesses to administer the CRC.
“ESA is pleased that the Government is at least trying to listen to industry and address some of its concerns,” he told letsrecycle.com. “The announcement on simplification is a move in the right direction, and the focus on a core range of fuels will make the scheme easier to administer.”
Bobby Collinson, MD at Power Efficiency, explains the changes that the 2010 CSR will have on the CRC Scheme, and how companies can still benefit from their involvement. If you are one of the thousands of companies affected by the government’s CRC Energy Efficiency Scheme, you will undoubtedly be aware that the recent Comprehensive Spending Review (CSR) has set down a number of amendments. Whilst we very much feel these amendments have, in effect, turned the scheme into a green tax and removed many of the benefits that companies will already have invested in, it is vital to understand all the implications to your organisation and where benefit can still be gained.
The facts are as follows – the revenue from selling CRC carbon allowances will now not be recycled to participants, but will be retained by the government. The first allowances payments (for the year 2011-2012) will be in 2012 not 2011, and so will be paid in retrospect. Further decisions on allowances sales will become a matter for the budget.
The league table element of the scheme will continue and retain the rules and publication dates that have already been established. In addition, annual reporting and allowances purchasing, whilst subject to a further consultation exercise, are expected to go ahead. What this means to your organisation is that the scheme essentially becomes a green tax at around 5-10% of annual energy costs and payable in arrears, like most taxes. If you have tenants, you can on-charge allowance costs under the scheme as a tax, and if your organisation performs well in the league table there will be substantial benefits in terms of reputation.
Budget spending cuts have turned CRC environmental carrots into financial sticks, claims on365
Loughborough, October 26, 2010 – Following the government’s Comprehensive Spending Review last week, several cuts and reductions are being put into place and the effects are already being felt across the UK. on365, a specialist in the planning, installing, management and optimisation of physical IT infrastructure and utility services calls for a review of the proposed restructuring of the Carbon Reduction Commitment (CRC).
When the CRC was initially introduced, it was positioned to the market as an initiative to ensure greener data centre operation and to significantly reduce UK carbon emissions. Originally, from April 2011 results would be published in the CRC league table and these would influence the organisations’ future energy costs and financial reimbursements or fines which would be determined by performance.
The restructured CRC means that the scheme has now become a stealth carbon tax due to government’s decision to direct CRC funds back to the Treasury, instead of being redistributed, as originally planned, to the top performing businesses. It is estimated that revenues from allowance sales totalling £1 billion p.a. by 2014-15 will be used to support public finances rather than going back to scheme participants. However, under the restructuring the burden on businesses will, in the first instance, be slightly reduced by the fact that the first allowance sales for 2011-12 emissions will be pushed to 2012 instead of 2011, giving businesses a deferral of cash flow.
Chris Smith, sales and marketing director at on365, comments that: “I think that CRC now reads ‘Corporate Restraining Charge’. In effect this is now a tax and not an incentive to reduce carbon emissions. Corporate environmental responsibility is now measured in pounds sterling with the carrot to encourage businesses to participate being replaced by a stick.”
About on365
on365.co.uk is a specialist in the planning, installing, management and optimisation of physical IT infrastructure and utility services, from the desktop to server rooms to data centres. Its comprehensive IT support capabilities encompass installation, system testing, network integration, on-site maintenance and audit/review services. It has clients across the UK and EMEA in the financial, telecommunications, utility, transport and leisure sectors.
CRC News is the online voice for the CRC Scheme (Carbon Reduction Commitment) and Energy Efficiency in Buildings. The site covers information about the CRC EES , CRC Case Studies , CRC Guidance , CRC News, Energy Efficiency Consultants News, Energy Management & Energy Savings , Energy Measurement and Monitoring , Energy Recording and Reporting , Events , Fines and Penalties. For more information, subscribe to the CRC News RSS feed or subscribe to CRC News by Email. You can also follow us on Twitter@CRC_News_
…Companies lose potential benefits in which they have invested thousands of pounds…
London – UK, 26th October 2010 – Power Efficiency, the energy procurement and carbon strategy consultancy, has today issued its assessment of the changes to the CRC Energy Efficiency Scheme that will be imposed as a result of the Coalition Government’s 2010 Comprehensive Spending Review announced last week, branding them “an unfair u-turn that has turned the scheme into a green tax and removed benefits many businesses will have invested in at a time of hardship.”
John Field, Director of Carbon Management at Power Efficiency stated; “The changes to the CRC Scheme represent an un-signalled U-turn on existing regulations. Companies have invested in actions with enhanced cash benefits that have now disappeared overnight. Examples are accreditation for the Carbon Trust Standard, typically costing £15,000, and installing Automatic Meter Reading which both provided enhanced rates of return under the CRC Scheme. While these actions remain positive and cost effective, it is unfair to companies that the enhanced benefit under the CRC regulations has been lost.”
“The CRC Scheme has become a green tax at 5-10% on companies’ annual energy costs. This will increase the pressure on companies to manage their energy use and carbon emissions downwards. Companies’ budgeting is also affected: instead of planning for a six-month cash-flow, it is now an annual payment.”
Plans by the UK government to take £1bn from the sale of carbon credits under the CRC Energy Efficiency Scheme have been described as a ‘one-dimensional tax on inefficiency’.
Rob Tanzer, technical support manager of Emerson Network Power’s Chloride Business, said, ‘The CRC Energy Efficiency Scheme was originally a self-supporting ‘carrot-and-stick’ scheme – but the carrot’s been taken away.’
He said, however, that in combination with rising energy costs, UK data centres and the high-tech industry still have huge incentives to cut energy costs by investing in increased efficiency.
‘Enhanced Capital Allowances permit investment in energy efficient equipment to be offset against tax – so business needs to make smarter use of the incentives that remain,’ said Tanzer.
The change to the CRC scheme was announced at the same time as the government committing £1bn to the Green Investment Bank and standing by the previous administration’s commitment to spend £60m on upgrading the countries port infrastructure.