‘Firms could lose low carbon incentive’

NORTH West businesses could lose out on an incentive which the previous Government set up to encourage firms to cut the amount of energy they use.

Lawyers at DLA Piper in Manchester say the Government plans to simplify the Carbon Reduction Commitment (CRC) scheme that charges big users of electricity and returns cash to those firms that reduce their consumption.

The Government, under pressure to cut the national debt, now plans to divert the payments – which were expected to reach £1bn by 2014 – into central coffers, according to DLA.

Ailish Oxenforth, environmental lawyer at the firm said: “The detail of the change is just sinking in for big energy users. The funds raised by the CRC scheme will no longer be used as a reward for high-performing businesses, but will instead be directed towards supporting public finances, including, spending on the environment.

“Companies have already invested huge amounts of time and resource in preparing for the CRC, so the realisation that money is not going to be recycled to businesses will come as a bombshell for many. Whilst promises to further simplify the scheme will placate some of the CRC’s critics, the loss of the ‘reward’ for performance is unlikely to win much favour.”

The CRC regulations, which apply to firms with an annual energy bill of more than £500,000 and use half-hourly meter systems, are part of the Government’s commitment to reduce greenhouse gas emissions by 80% by 2050.