Following the consultation on limited changes to the Carbon Reduction Energy Efficiency Scheme (the “CRC”), which closed in December 2010, the Department of Energy and Climate Change (“DECC”) has prepared informal proposals on further changes to the CRC in order to stimulate stakeholder comment.

The proposals are stated not to be Government policy but a mechanism to fuel debate and exchange of ideas. Whilst priority areas for simplification are identified, other areas are also outlined as potential candidates for discussion papers and there is a catch all invitation for views on the scheme generally.

Feedback is invited by 11 March 2011. Full details are below. This is an opportunity to influence the simplification review and ultimately the end design of the scheme. Those affected should consider the papers and any other proposals (not necessarily aired) which they may wish to make in good time to secure a role in participating in ongoing developments.

Priority areas for simplification

The priority areas are:-

  • Private (business) sector organisational rules of the CRC Energy Efficiency Scheme
  • Review of the CRC supply
  • Review of the CRC qualification criteria
  • Reducing the overlap between schemes (especially between the CRC scheme, Climate Change Agreements and the EU Emissions Trading System)
  • Timing and frequency of allowances in the CRC Energy Efficiency Scheme from 2012 onwards

Please click here for copies of the papers

Other areas for potential simplification

Due to feedback received DECC has identified other aspects of the CRC which could be reviewed which include:

  • The nature of the reputational incentives of the scheme
  • Definition of transport used in the scheme
  • Treatment of public versus private sector participants
  • Energy threshold for qualification
  • Treatment of heat
  • Landlord/Tenant relationships and responsibilities

Invitation for other views

In addition DECC has stated that any views on how the CRC scheme could be simplified would be welcomed. However, if suggestions are made it would be helpful to cover

  • How the proposals would tackle the four barriers to the uptake of energy efficiency in large organisations (e.g. insufficient financial drivers, uncertain reputational benefits of demonstrating leadership, split incentives between landlords and tenants and organisational inertia).
  • How the proposals might affect the magnitude of the energy use coverage of the scheme
  • How the energy efficiencies/emissions savings associated with the proposals could be verified/audited in a proportionate but effective manner.