Energy efficiency requirements – changes ahead

The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme (the Scheme) came into force on April 1, 2010. It is a mandatory emissions trading scheme for large businesses and public sector organisations in the UK, aimed at reducing energy consumption and requiring energy use to be reported annually.

Since its introduction, the Scheme has been perceived as overly complex and administratively burdensome, not least in a landlord/tenant context.

It is therefore welcome news that the CRC Energy Efficiency Scheme (Revocation and Savings) Order 2018 comes into force on October 1, 2018 and provides for the early closure of the Scheme. The CRC compliance year 2018/19 will be the last one for which participants will be required to report their energy use, although there will be some continuing obligations for a limited period.

The closure of the Scheme is part of a package of reforms to the energy efficiency landscape. These include

• Recovering the revenue from early closure of the CRC scheme by increasing the main rates of the Climate Change Levy (CCL) from April 2019.
• Rebalancing CCL rates for different fuel types.
• Introducing a streamlined energy and carbon reporting (SECR) framework for businesses in the UK by April 2019.

That is not all on the energy efficiency front

• On July 26, 2018 the government published a call for evidence on how Energy Performance Certificates can be improved.
• Later in the year the government is expected to publish amendments to minimum energy efficiency standards (MEES) for let domestic property, introducing a capped landlord contribution in place of the current rule that energy efficiency improvements are only required if they are at “no cost” to the landlord.