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Climate Action

UK plans to scrap controversial corporate energy efficiency scheme

George Osborne, the UK finance minister, has this week revealed that the government is planning to scrap a scheme to cut corporate energy use introduced during Labour’s time in office and replace it with an alternative energy tax.

  • 23 March 2012
  • George Osborne, the UK finance minister, has this week revealed that the government is planning to scrap a scheme to cut corporate energy use introduced during Labour’s time in office and replace it with an alternative energy tax. In his budget statement earlier this week, Osborne said that the Carbon Reduction Commitment (CRC) “is cumbersome, bureaucratic and imposes unnecessary costs on business.”
Finance minister George Osborne announced the governmmet's plans during his budget speech earlier this week.
Finance minister George Osborne announced the governmmet's plans during his budget speech earlier this week.

George Osborne, the UK finance minister, has this week revealed that the government is planning to scrap a scheme to cut corporate energy use introduced during Labour’s time in office and replace it with an alternative energy tax.

In his budget statement earlier this week, Osborne said that the Carbon Reduction Commitment (CRC) “is cumbersome, bureaucratic and imposes unnecessary costs on business.”

The CRC was launched to not only reduce the UK’s greenhouse gas emissions by up to 4 million tonnes, but to also cut corporate energy bills by £1 billion annually by 2020, with businesses and institutions, including banks, hospitals and schools, legally bound to the initiative.

Since its introduction, the CRC has been the subject of widespread criticism, with many claiming that the scheme is far too costly, confusing and unreasonable.

“We will seek major savings on the administrative costs and if that cannot be done we will replace the revenues with an alternative environment tax,” said Osborne.

The government will bring forward proposals in autumn 2012 to replace CRC revenues with an alternative environmental tax, and will engage with business before then to identify potential options, according to the budget document.

The document also stated that the government is planning to increase the carbon price support rate for 2014-2015 by more than 30 percent from £7.28 per tonne of carbon dioxide to £9.55.