CBI Calls For Scrapping Of ‘Untenable’ CRC Scheme

The government’s flagship CRC energy scheme is “untenable in its current form”, claims the Confederation of British Industry (CBI). It believes the scheme “lacks credibility and has lost businesses’ trust” and should be scrapped.

In a policy brief, the business watchdog stated that the removal of the reward element in the Carbon Reduction Commitment (CRC) scheme will disincentivise companies. It also slams the government for removing this element two weeks after businesses had signed up for the scheme.

No Incentive To Reduce Carbon Emissions

“We now have a carbon reduction scheme that doesn’t encourage companies to reduce carbon emissions, and actually adds to the cost of doing business,” said Rhian Kelly, CBI director for business environment. “The Government pulled the rug out from under organisations that signed up to a scheme to reward them for becoming energy efficient in good faith.”

CRC is nearing the end of a consultation period which has led to rumours that it may be merged with other green taxes or to demands that it should be streamlined. Claims have also been made that there could be a move to relocate data centres – essential parts of the cloud economy – to other scheme-free countries.

“Policy uncertainty like this undermines the long-term energy efficiency plans of companies, and will do little to help us reach our emissions targets,” Kelly said.

The report tries to be constructive and lays out two possible solutions. “If the government goes back to the core principles originally enshrined within the CRC, it could unlock the huge potential for carbon reduction through energy efficiency,” it states.

“This brief argues that, in order to encourage action on energy efficiency, the government must either reinstate revenue recycling in the CRC or, if the money cannot be found to do so, scrap the scheme and provide a more simplified mechanism to encourage take-up across the business community.”