Proposals to make the CRC Energy Efficiency Scheme simpler, easier and more straightforward have been outlined by Climate Change Minister Greg Barker.

The CRC scheme started in April last year to reduce carbon emissions in businesses through energy efficiency improvements. It started for mainly large companies – Marshalls were included – but required all companies on half-hourly rates to register. Thousands didn’t, in spite of the threat of fairly hefty fines. So rather than start imposing fines on so many companies, the implementation of the scheme, scheduled for April this year, was delayed while the government reviewed the scheme.

It is supposed to work by companies purchasing enough carbon credits to cover their power usage for the year. If they reduce their carbon emissions by more than average during the year, they can reclaim some or all of what they have paid, depending on the level of their energy savings.

When around 7,500 half-hourly rated businesses had not registered in time for the April start, the scheme was put on hold and the government has been discussing the proposals with industry, other scheme participants and regulators.

They hope the resulting proposed amendments to the scheme will make it simpler and provide greater certainty about who is included, greater flexibility of participation and less overlap with other government schemes.

One of the proposed changes is that businesses will only have to report on their use of four fuels, rather than the 29 previously included. Around 95% of emissions captured under the CRC come from electricity and gas, so they, with kerosene and diesel for heating, are the only fuels now proposed to be included. This could significantly reduce the administration burden on companies without compromising the emissions coverage of the scheme.

Commenting on the proposed changes to the scheme, the Climate Change Minister said: “Businesses have made clear to me their serious concerns about the overly complex and bureaucratic CRC scheme. We’ve got to help business reduce their emissions, not strangle them in red tape. We’ve already taken action to remove 10,000 organisations from the scheme but we’ve got to do more to help make it easier for those organisations taking part.

“I believe the principle of the scheme is right, which is why I am proposing to make the CRC simpler while still protecting its strong environmental integrity to cut emissions in large organisations and businesses.

“Energy efficiency is a no brainer. It saves money and cuts carbon. Our proposals will make it easier and simpler for businesses to feel the benefits of using less energy as well as supporting jobs in the energy savings industry.”

Formal consultation on the amended proposals will begin early next year although comments from participants are encouraged now.