These draft regulations introduce changes to simplify the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. The CRC scheme began in 2010 as a mandatory energy efficiency scheme for large public and private sector organisations and was designed to avoid overlap with the existing climate change levy and EU ETS. Changes to the scheme include: reduction in scope to cover only electricity and gas consumption; a 2% de minimis threshold for reporting gas used for heating; and withdrawal of all state-funded schools from participation in the scheme.
Since the CRC Scheme began in 2010, a number of aspects of the policy have been criticised by stakeholders as too complex, difficult to understand and costly to administer.
In response, the government committed to simplify the CRC Scheme, and that any regulations retained were less burdensome and administratively costly for business, and more practicable.
The principal changes are:
• a reduction in fuels from 29 to 2. The scheme will now only cover emissions generated from the consumption of electricity and gas
• that for gas, only when this fuel is used ‘for heating purposes’ will this need to be reported and allowances purchased for. Participants will be able to assume that all gas consumed is for heating purposes
• an organisation-wide 2% de minimis threshold for gas (for heating). So if a participant’s gas consumption is below 2% then that participant will not have to report on that fuel or purchase allowances
• to withdraw all state funded schools (ie maintained schools and Academies) in England from CRC Scheme participation and to implement alternative robust measures that will incentivise and support schools to obtain both energy cost and emission savings.