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CRC Energy Efficiency Scheme

Volume 555: debated on Monday 10 December 2012

On 26 March 2012, Official Report, columns 89-90WS. I published a formal consultation setting out our ambitious simplification package for the CRC energy efficiency scheme. Since then we have engaged extensively with stakeholders on our proposals and received over 250 responses to our consultation. The majority of responses agreed with our proposals for simplifying the scheme and welcomed the package of simplification proposals.

The Department will now publish a formal Government response to our consultation. Our simplification package for CRC will radically reduce the administrative costs to participants by over half (55%), which will deliver around £272 million savings for CRC participants up to 2030. The package will reduce both the complexity of the scheme and its overlap with other climate legislation, without undermining its energy efficiency objectives.

We have also gone further in a number of our simplifications. We have reduced the number of fuels that participants need to report to two, to reflect the fact that electricity and gas make up the vast majority of the CRC’s emissions coverage. We are also introducing an assumption that all gas used is for heating purposes and a 2% de minimis threshold on gas (for heating), reducing the reporting burden for organisations with very low gas consumption.

I understand participants’ concerns around the performance league table and have decided to abolish it. Participants’ aggregated energy use and emissions data will continue to be made public annually in line with the Government’s transparency agenda, which will ensure that CRC participants’ energy efficiency behaviour remains visible.

We are also bringing in a number of simplifications in advance of the beginning of phase two of the CRC, which will both help to reduce the administrative burden and allow participants to feel the benefits of simplification earlier. The key proposals which will be bought in for the last two years of phase one (2012-13 and 2013-14) are the reduction in fuels reported and the de minimis on gas, both of which will reduce the complexity of the scheme immediately.

Our simplification package optimises the projected energy and carbon savings delivered by the CRC energy efficiency scheme while reducing its complexity and administrative cost.

I will lay the necessary statutory instrument to implement the simplification package for the CRC scheme before the House shortly.