Originally published October 20, 2010
Keywords: George Osborne, CRC, energy efficiency, spending review, carbon allowances, carbon tax
Chancellor of the Exchequer, George Osborne, today announced major changes to the CRC Energy Efficiency Scheme ("CRC") that will make the scheme much more expensive for those organisations required to participate.
In the Comprehensive Spending Review published today, the
Government has abandoned the idea of recycling the money raised in
the annual sale of carbon allowances to participants based on their
environmental performance. Instead, the money raised through the
scheme – totalling up to £1 billion a year by
2014/15 – will go to the Exchequer, at least until
2015.
Initially the CRC gained support from businesses because it was not
simply a carbon tax. When it was introduced, the recycling payment
guaranteed that the money raised would not go into the general
Treasury pot but instead incentivise good environmental
behaviour.
This element of the scheme has been abandoned and now the CRC is
effectively a carbon tax.
As a sweetener, the Government has deferred the first sale of
allowances from April 2011 to April 2012. However, it appears that
in 2012 CRC participants will be required to purchase allowances to
cover emissions in both the previous year (2011-12) and in the
current year 2012-13.
We are bringing together a range of stakeholders to discuss CRC as
well as wider environmental issues, so please let us know if you
would like to be involved.
Visit us at mayerbrown.com
Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
Copyright 2010. Mayer Brown LLP, Mayer Brown International LLP, and/or JSM. All rights reserved.