HM Treasury have hinted that the Carbon Reduction Commitment Scheme (CRC) may be scrapped entirely as part of a planned overhaul of current business energy taxes.
George Osborne announced plans to reduce the “alphabet soup” of environmental policies; with the aim of streamlining a raft of overlapping environmental policies and taxes.
With a planned completion date of July 2016, the move is likely to be welcomed by UK businesses currently confused by the mess of environmental policies.
The government is seeking input from UK businesses to decide which policies will be ditched in the restructure, as well as how to develop a clearer landscape that incentivise commercial energy efficiency.
Aware that current business energy policies can lead to investment in renewables over energy efficiency. The Treasury is seeking to reverse this and have stated that it may subsidise energy efficiency measures “subject to strict criteria”.
The Treasury are considering options such as Feed-in Tariffs (FITs); which not only benefit energy efficiency, but also tax relief, competitive funding and supplier obligations.
While a recent government-commissioned review of the CRC scheme suggested that it had broadly achieved its objectives, the report concluded that the scheme had frustrated many businesses due to its complexity, design and costs.
The Treasury have also hinted that the Energy Savings Opportunity Scheme (ESOS) may become a central tenant of future energy efficiency policy, and would be open to conversations concerning incentives based around efficiency measures recommended by ESOS audits.
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