Businesses Want to Scrap CRC Scheme

A recent survey on the Carbon Reduction Commitment Energy Efficiency Scheme was carried out by npower showed that businesses wanted to scarp the scheme.  This can hardly be a surprise as the CRC is now just a complicated carbon taxation scheme and I don’t know any businesses which would welcome a new tax especially one which is not easily administered.

The Carbon Reduction Commitment Energy Efficiency Scheme tax’s large energy users on the carbon tonnage their energy usage equates to.  To be liable for the CRC tax businesses have to use 6,000 MWh (mega watt hours) approximately equivalent to a spend of £500,000 per annum.  For each tonne of CO2 of oil, gas and electricity consumption (1 kwh of electricity = 0.54kg of CO2, 1000kg = 1 tonne) a tax of £12 is due.  Taxing carbon at £12 per tonne doesn’t really incentivise businesses to reduce CO2 as it will be more cost effective to pay the tax than to make the investment in infrastructure to make a significant reduction in CO2.

In future years the tax per tonne will increase and guesstimates are that in 3 years time it will be in the region of £30 – £40 per tonne.

James Eades

By: James Eades

Operations Director, James Eades is EnergyMyWay's in-house expert on renewable energy policy, microgeneration technologies and best practice in the renewable energy industry.