Budget Changes - 2016
Changes to Carbon Reduction Commitment (CRC) Energy Efficiency Scheme
The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is a UK government scheme designed to improve energy efficiency and reduce carbon dioxide emission in private and public sector organisations. The CRC Energy Efficiency Scheme will end following the 2018/19 compliance year, following a review of business energy taxes. The complex and bureaucratic nature of the scheme was cited by the Treasury as playing a role in the decision.
Changes to Climate Change Levy (CCL)
The Climate Change Levy (CCL) is a tax on UK business energy use, charged at the time of supply. CCL will rise by 2019 to recoup the income lost by the closure of the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. The difference between CCL rates charged on electricity and gas is also set to change from the current 2.9:1 ratio to a ratio of 2.5:1. This will result in electricity being relatively cheaper, and gas relatively more expensive - thought to be a response to an increase in renewable technologies in the generation of electricity. The government intends on rebalancing the ratio to 1:1 by 2025.
Increased Climate Change Levy Discount for Climate Change Agreements
Organisations with Climate Change Agreements will receive an increase in the discount applied to Climate Change Levy (CCL) to compensate for the increase in CCL.
Proposal for New Carbon Reporting Framework
The government propose to combine Climate Change Agreements (CCAs), European Union Emissions Trading System (EU ETS), and the Energy Savings Opportunity Scheme (ESOS) into one carbon reporting framework to significantly reduce the current administrative output. A consultation is expected to be launched in summer 2016, however it is expected that inclusion criteria will resemble an expanded ESOS - including large public and third sector organisations. A de minimis arrangement will be likely be explored to protect smaller businesses and low emitters