29 September 2015 | James Richards
The government has opened a review of the current system of business energy taxes in a move that could spell the end for the Carbon Reduction Commitment.
The consultation, Reforming the business energy efficiency tax landscape, launched yesterday, sets out new proposals to simplify the current system after the government canvassed opinion from businesses and academics (as reported in FM World in 2012).
The review has three stated aims: boosting productivity; supporting growth; and decarbonising the economy. In practice, this means that organisations will face one tax and one reporting scheme.
Under the proposals, the existing scheme, the Carbon Reduction Commitment (CRC), which has been criticised for being too complex, would be abolished. It requires participants to monitor and report their energy use and to buy allowances for every tonne of carbon dioxide they emit.
Launched in 2010, the scheme made it a legal requirement for some large organisations in the UK to take up cost effective energy measures.
The proposal looks to move towards "a single tax by abolishing the CRC and moving the revenue raising element into a single business energy consumption tax".
In the statement announcing the review, Amber Rudd, Secretary of State for Energy and Climate Change, said: "Moving to a low-carbon economy is vital for our long-term economic and environmental prosperity, and we are determined to do so in a way that backs business and helps them to innovate, grow and create jobs. We want to reduce the burden on business and make it easier for them to grasp the opportunities that clean growth represents."
In response, the UK Green Business Council welcomed the move to a single reporting scheme.
Richard Griffiths, senior policy adviser, said: "Moving to a position where organisations are faced with just one key reporting scheme should help to free up organisations' resources and allow them to focus on delivering energy savings, rather than administration."
The consultation is open until 9 November and the government is welcoming views from businesses, organisations and the public.