‘Complex’ CRC putting off business

With only days remaining until the CRC scheme comes into force it is still to 'complex' for a lot of firms to get to grips with.

As of today (September 27) 2,598 firms have signed up out of up to 4,000 organisations – the figure was rounded down by the Environment Agency in August from 5,000 – estimated to be affected by the scheme.

But the CRC, which starts officially on Thursday (September 30), could have put off businesses because it’s too ‘complex’ according to an influential committee’s report.

According to the Committee on Climate Change the CRC should be overhauled before its second phase gets underway in 2013.

Chief executive of the committee, David Kennedy, said: “The CRC scheme has the potential to make an important contribution towards meeting carbon budgets.

“However, current proposals risk making the scheme unnecessarily complex, we are therefore proposing that Government modifies its design to make participation in the scheme easier to for companies and public sector organisations.”

“The committee also set out options for a more fundamental redesign of the scheme, that Government could consider in the context of a strengthened carbon price.

“These included, reviewing the wider regulatory system and reforming the current method of revenue recycling and, dropping the requirement to purchase allowances.”

The Committee’s main recommendations are:

The sale of an unlimited number of allowances at fixed price should be extended from the first phase into the second phase, rather than introducing a second phase cap and complex auctioning scheme.

Separate league tables and revenue recycling should be established for the public and private sectors, and public sector financial budgets should be set to allow upfront investments in energy efficiency improvements – this will

Allow for the fairer treatment of the two sectors, as the current scheme is at risk of transferring funds from public to private sector organisations.

Participants should have to purchase CRC allowances to cover renewable energy generation, including heat.

A spokeswoman for the Environment Agency, who oversee the scheme, said: “We welcome the report.

“We are aware that some organisations believe the CRC is complicated and we’ve been working with them to explain it and help them register.

“The Energy minister has already made it clear he wants to simplify the scheme. We’ll be sharing our ideas based on our experience as the scheme’s operator.”

Luke Walsh

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