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CRC to be abolished

CRC to be abolished

Abolition of CRC from 2018/19

Following the consultation on ‘Reforming the Business Energy Efficiency Tax Landscape’, the Budget last week announced the abolition of the Carbon Reduction Commitment (CRC) from 2018/19 and the consequent increase in the main rates of the Climate Change Levy (CCL) to cover the cost of the abolition.

The Government has also published a formal consultation response which includes more detail on these proposals:

Consultation Response – Summary of Key Decisions

  • The CRC will close following the 2018/19 compliance year with no purchase of allowances required to cover emissions for energy supplied from April 2019. The Government will work closely with Devolved Administrations on closure arrangements for the scheme.
  • The main rates of the CCL will increase from April 2019. In addition the CCL rates for different fuel types will be rebalanced from April 2019 moving to a ratio of 2.5:1 (electricity:gas) with an intention for further rebalancing so as to reach a ratio of 1:1 (electricity:gas) by 2025.
  • Government will consult in summer 2016 on a simplified energy and carbon reporting framework for introduction by April 2019. This will propose mandatory annual reporting for the organisations within scope, with board or senior level sign-off and some public disclosure of data. The consultation will cover issues such as the range and size of organisations to be covered and the amount and type of information to be collected and disclosed.
  • GHG reporting for listed companies will continue but Government will explore integration of the existing compliance and reporting requirements of CCAs, EU ETS and ESOS with any new reporting framework. Small or low energy-consuming businesses will be protected by de minimis arrangements for the new reporting framework
  • To ensure the most energy intensive sectors remain protected from the impact of the CCL, Government will increase the CCL discount available to Climate Change Agreement (CCA) participants from April 2019 to ensure they pay no more than an RPI increase
  • The existing CCA scheme eligibility criteria will remain in place until at least 2023. The CCA target review (including a review of the buy-out price for target periods 3 and 4) will recommence later this year.  

The full response can be read here.

 

Source ssebusinessenergy.com

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