Following a review of the Carbon Reduction Committment (CRC) the government recently launched a consultation seeking views on proposals to significantly reform the requirements for businesses to report on their energy use and measures to reduce it. The current policy landscape has been criticised by businesses that they are required to report similar information through a number of different schemes, leading to unnecessary administrative costs that could have been better spent on implementing energy efficiency measures.
The reforms will seek to:
- Develop a single reporting framework, aimed at reducing compliance costs and which will likely follow the ESOS requirements;
- Abolish the CRC with a replacement business energy consumption tax (using the Climate Change Levy mechanism); and
- Introduce new incentives to encourage energy efficiency which are funded through increases in the new tax.
The announcement that any future framework is likely to be based upon ESOS further highlights the need for businesses to ensure they are compliant ahead of the 5th December 2015 deadline and that they will need to follow a similar system in future. With penalties for non-compliance of up to £150,000 businesses are starting to wake to the need to capture energy use and put forward initiatives to reduce it. Whilst many businesses will welcome the move to a single form of energy taxation – allowing them to free up resources and to put greater emphasis on delivering energy savings – the government, has a crucial role to play in ensuring that any new incentives to encourage energy efficiency improvements are as effective as possible.
For further information on these reporting reforms or for ESOS advice contact Chris Burgess /0203 078 9734