“It’s not a commitment; it’s a tax,” So said George Osbourne as he announced the termination of the Carbon Reduction Commitment (CRC) energy efficiency scheme, with effect from the end of the 2018/19 compliance year.
“So I can tell the House: we’re not going to reform it. Instead I have decided to abolish it altogether.”
He said the Treasury would increase the main rates of the CCL from 1 April 2019 to “cover the cost of CRC abolition in a fiscally-neutral reform”.
A document published after the speech said: “The increases in CCL main rates from 2019 to 2020 recoup revenue lost from the abolition of CRC and strengthen the incentive for businesses with the greatest potential to save energy.”
“This is not necessarily good news for everyone.” Says Darren Jones MD of Low Carbon Europe Ltd.
“ Instead of CRC taxation, energy is going to be stealthily taxed through increased climate change levy (CCL), hence this will affect ALL organisations not just those that are currently in the CRC scheme.
This will have a significant impact on large NHS Trusts and similar organiastions that are in the EU ETS scheme; these organisations are currently exempt from paying any CRC taxes, but will be finding their cost of energy will increase.
Increased CCL levy will increase the cost of every unit of gas and electric consumed, requiring organisations to focus even more emphasis on user efficiency and demand side management.”
