CRC proposals address cash concerns

The government’s Carbon Reduction Commitment (CRC) proposals have addressed manufacturers’ concerns about the CRC’s impact on their cashflow, according to EEF.

The CRC is an attempt to bring cost-effective carbon-emission reductions in the service sector, public sector and other less energy-intensive industries. Under the scheme, companies will be required to report their carbon-reduction performance each year.

The manufacturers’ organisation, EEF, had previously urged the government to reconsider proposals within the scheme that would have restricted the cash flow of companies during the recession.

Gareth Stace, head of environment policy at EEF, said: ‘Businesses have been very concerned about the impact the CRC would have on cash flow. Purchasing allowances, compliance, registration and annual fees are all extra costs, additional to any money invested in energy-efficiency measures.

‘The government’s decision not to seek auction payment from organisations for the first year will give those firms the leeway to use that money to invest in their businesses . We also welcome the indication that the government will publish its final guidelines by the end of this month.

‘We have always insisted that business should have as much notice as possible so they can prepare for the scheme. For each day the guidance is delayed, the cost and difficulty of compliance increases.’

The EEF was also concerned that companies that made early attempts to reduce emissions would be penalised. Under the original proposals, businesses that had made carbon-reduction changes could only benefit from this proactive action in the first two years of the scheme. The government has since agreed to extend the period to three years.

Stace added: ‘The government has addressed manufacturers’ major concerns with the CRC. We support the government’s commitment to increase energy efficiency and reduce emissions in the large, non-energy-intensive sector. However, it is imperative that it works to achieve these objectives without placing unnecessary cost burden on business.’