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Carbon Reduction Commitment Energy Efficiency Scheme

Volume 502: debated on Tuesday 8 December 2009

To ask the Secretary of State for Energy and Climate Change what his latest estimate is of the gross revenue which will arise from the sale of allowances through the Carbon Reduction Commitment Scheme before the recycling of such monies to scheme participants in each of the next five years. (303391)

The Department currently estimates that during the introductory phase of the CRC Energy Efficiency scheme, allowance sales could generate in the region of £650 million each year in 2011 and 2012. An integral aspect of the scheme is that this sum is returned to participants six months after the main allocation of allowances, making the scheme broadly revenue neutral to the Exchequer.

It is important to emphasise that these are preliminary estimates made using significant assumptions that will not be known with more certainty until after the start of the scheme. The main assumptions are an estimate of the quantity of emissions covered by the scheme and the uptake of energy efficiency measures within the sector. Until participants have registered for the scheme during April to September 2010 and reported their emissions in July 2011 we will not know the CRC emissions coverage accurately.

The sum likely to be raised from the auctioning of allowances during the capped phases of the scheme from 2013 onwards is yet more uncertain. Until the Government have taken a decision on the appropriate level of the cap, taking into account advice from the Committee on Climate Change it is not possible to estimate accurately the likely revenues from the five years of the first capped phase.