The Government has announced that the Carbon Reduction Commitment (CRC) scheme will close after the 2018/ 19 compliance year. This means that businesses currently affected by the CRC should continue to report, purchase and surrender allowances until the scheme comes to an end.
What does this mean for affected businesses?
The closure of the CRC scheme means that it will no longer be necessary for affected businesses to purchase allowances to offset carbon emissions. However, as a result of the scrapping of the CRC, there inevitably needs to be some form of filling the gap in terms of lost revenue. From April 2019, revenue lost will be regained from increased Climate Change Levy (CCL) rates, which means that businesses will see an increase in their energy bills. Climate Change Agreement (CCA) participants will benefit from an increase in the CCL discount, but it is unlikely that eligibility criteria will change until at least 2023.
New energy and carbon reporting framework
With regard to reporting, there will be further consultation, in the summer, on ‘a new, simplified energy and carbon reporting framework, set to be introduced before April 2019’.
The consultation will propose that affected organisations carry out mandatory annual reporting, which will require board or senior level sign-off.
All large UK businesses and their corporate groups are likely to fall within scope. For those currently obligated by the Energy Savings Opportunity Scheme (ESOS), some of the requirements will sound familiar. It has also been proposed that the new framework could integrate CCA reporting requirements with the EU Emissions Trading System.
Track energy use to identify saving opportunities
It is still important that businesses keep track of energy use, as prices will be rising and annual reporting will be necessary. Valpak is hosting an Energy Seminar which will cover energy compliance and will outline how businesses can make the most of energy saving opportunities. Please visit our energy events page to book your place.
Energy Savings Opportunity Scheme (ESOS) review
We are eagerly waiting to find out if ESOS will be reviewed following the consultation in the summer. Valpak will host a webinar to summarise the changes outlined in the consultation, so please also keep an eye on our energy events page.
Valpak keep customers up-to-date with changes to environmental legislation via an Industry News Update mailing. If you do not already receive a copy of this and would like to be added to our mailing list please contact us.