Restore CRC revenue recycling, says CBI

The Confederation of British Industry calls on government to stop the Carbon Reduction Commitment ‘stealth tax’

The government must restore revenue recycling to the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, says the Confederation of British Industry (CBI).

If not, it should scrap the scheme and consider replacing it with an extended climate change levy (CCL).

The CBI makes the comments in its response to a recent consultation by the energy and climate department (DECC) on ways to reform the CRC. It elaborates on the CBI’s budget submission (ENDS Report, March 2011).

The CBI says DECC’s proposals to simplify the CRC do not go far enough. The problem with the CRC is that the government has turned it into a 'stealth tax' by removing the mechanism to recycle revenue back to participants based on performance.

The CBI argues that this change has ended the scheme’s incentive for participants to become more energy efficient. This is because energy is a small cost to most companies and an additional tax will go unnoticed. The CRC, it says, is burdensome due to its registration and reporting requirements.

The CBI recommends that the government should uphold the original principles of the CRC and reinstate revenue recycling. It should then consult on the CRC’s emissions trading phase.

If DECC does not restore revenue recycling, the government should replace the CRC with a simplified mechanism to encourage energy efficiency.

The CBI says one option is to replace the CRC with the CCL on business energy use because it is much simpler to collect. In order to raise the profile of the CCL, the government should extend the use of voluntary climate change agreements to new sectors. CCAs require companies to meet energy efficiency targets in return for a CCL rebate.

The CBI also asks DECC to reconsider the CRC league table as a reputational driver. It says the league is flawed because it favours absolute emissions over carbon intensity as a measure of performance and does not provide adequate explanation of the results.

The CBI suggests mandatory carbon reporting could be an alternative.

Compliance Search

Discover all ENDS content in one place, including legislation summaries to keep up to date with compliance deadlines

Compliance Deadlines

Plan ahead with our Calendar feature highlighting upcoming compliance deadlines

Most-read articles

Principal Planner

Leeds is a fast growing city and the main driver of a city region with a £64.6 billion economy.

Senior Landscape Architect, National Environmental Assessment and Sustainability (NEAS)

If you’re part of the Environment Agency, you’re part of the solution.

Environment Team Leader

If you want a role that offers variety and challenge, and to be a part of an organisation that has the sustainable management of natural resources at the core of our purpose, we would love to hear from you.

Project Support Officers (Sustainability), National Environmental Assessment and Sustainability (NEAS)

If you’re part of the Environment Agency, you’re part of the solution.

Senior Environmental Project Managers, National Environmental Assessment and Sustainability (NEAS)

If you’re part of the Environment Agency, you’re part of the solution.

Installations Officer - Control of Major Accidents Hazards (COMAH)

We are looking for two enthusiastic professionals to join our North West Hub Control of Major Accident Hazards (COMAH) Regulatory team as Installations Officers.

Installation Officer

If you’re part of the Environment Agency (EA), you’re part of the solution. Working with us means protecting and improving the environment for generations to come, tackling issues of national importance across a huge variety of disciplines.

Sustainable Development Programme Manager

An exciting opportunity has arisen for a driven and motivated individual to join a forward thinking and dynamic Directorate within Public Health Wales.