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Budget News on the Carbon Reduction Commitment (CRC) scheme

In the recent budget, George Osborne announced that the Carbon Reduction Commitment scheme (CRC) will be abolished from April 2019. This will be replaced by an increase in the Climate Change Levy (CCL) from 2019. The cost will then be charged to energy bills, on a cost per unit basis.

What this means is that from 2019, the cost will be paid monthly instead of once per year with the annual reporting orders. This will reduce the administrative burden on companies that currently take part in CRC - but it will penalise smaller organisations who are currently below the CRC threshold. The new CCL charges will be applied to all commercial supplies.

The CRC timetable will likely be as follows:
September 2016 - compliance payment for 2015/16 CRC year
September 2017 - compliance payment for 2016/17 CRC year
September 2018 - compliance payment for 2017/18 CRC year
April 2019 - Climate Change Levy increases
September 2019 - compliance payment for 2018/19 CRC year

Therefore, there are another four payments to make for CRC before the scheme is stopped and there will also be a level of crossover between paying through CCL and having to make the final CRC payment (unless companies purchase forecast allowances 15 months earlier).
So, although there is still some time to serve on CRC, the scheme will stay the same until the end date and the replacement will be much more straightforward to administer. There is also a possibility that, from 2019, the cost will be reduced slightly for CRC participants as the burden will be spread across all commercial supplies.

There will still be schemes, including ESOS and mandatory carbon reporting, that will require a level of energy reporting for many businesses therefore energy metering/reporting systems will still give a useful output. However, without CRC, there will hopefully be more money to spend on other areas of energy management that will more than likely result in real energy savings.

If you want to discuss this or any other carbon/energy requirement, please contact EDP on 08456 44 53 54.