On 17 November 2010, the Government issued a short consultation on proposed reforms to the CRC Energy Efficiency Scheme (CRC). Responses must be delivered by 17 December 2010.

Key Issues

The Government proposes only minor alterations to CRC at this stage, as detailed alterations are not practical midway through a phase. One of the proposed alterations would extend the introductory phase of CRC by one year. This would provide time to discuss further simplifications with stakeholders before the next phase of CRC begins.

The issues on which the Government is seeking views are:

  • extending the introductory phase by 12 months so that it runs until March 2014 rather than March 2013;
  • removing the information disclosure requirement for organisations that are not required to register as participants;
  • amending certain aspects of CRC in relation to Northern Ireland Government departments; and
  • amending certain responsibilities of the CRC administrator and correcting a number of cross-references in the CRC Order.

None of these changes appear controversial. Indeed, the Government has already prepared and issued a draft of the amendment order that will be needed for the changes to take effect by April 2011. This suggests that it does not anticipate any dissent.

Effect of Proposed Alterations

The two most significant changes are the extension of the introductory phase of CRC and the ending of the requirement for information disclosures.

  • The extension of the introductory phase means that allowances will continue to be sold at a fixed price for an additional year, rather than by auction. There are some consequential amendments to timings for phase 2 and subsequent phases of CRC, for example, the requirement to register for phase 2 will be postponed until 2013.
  • The ending of the requirement for information disclosures will save non-participants considerable sums of time and money. The Government considers that it has already received the necessary information from non-participants during the registration process. This will benefit approximately 15,000 organisations that would otherwise have had to make information disclosures during the introductory phase.

Going Forward

The limited nature of this consultation has disappointed participants in the CRC, and the property industry generally. However, the Government is still saying that it intends to simplify the manner in which CRC operates, and it has invited comments on the areas where simplification is most needed. Eversheds is working closely with the British Property Federation and other organisations to ensure that appropriate representations are made to the Department for Energy and Climate Change.

Responding to the Consultation

The consultation documents are available on the DECC website here.

Eversheds will be responding to the consultation.

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