Streamlined energy and carbon reporting: policy background

Improved energy efficiency measures in the business sphere are today widely accepted to have a positive effect on productivity, economic growth, security of energy supplies and decarbonisation.

Within this environment of increased sustainability, over the past number of years the UK government has implemented a variety of energy efficiency policies aimed at helping organisations reduce costs, save carbon and contribute to meeting emission reduction targets.

However, following a public consultation in 2015, the Department of Business, Energy and Industrial Strategy (BEIS) recognised that the sheer range of energy efficiency policies introduced had “created complexity and added burden to business consumers”.

As a result, reforms to improve the tax and reporting regime were announced, including the closure of the CRC Energy Efficiency Scheme (from 2019). *It is worth noting that the revenue generated from the sale of allowances in the CRC scheme will still be retained via an increased Climate Change Levy (CCL) rate charged via utility bills.*

Acknowledging that reporting still has an important role to play in energy efficiency measures, BEIS also announced that it would launch a new consultation on a Streamlined Energy and Carbon Reporting framework for introduction by 2019.

This consultation took place between 12 October 2017 and 4 January 2018, and is now closed.

What has been proposed?

In a nutshell, the new proposals aim to make mandatory energy and carbon reporting simpler for businesses, using existing standards and aligning with best international practice.

The ultimate objective of this is to reduce administrative burdens and raise awareness of energy efficiency, whilst also continuing to help businesses reduce bills, and save carbon.

With this in mind, during the consultation BEIS sought views on how to “further rationalise the landscape and encourage action from energy audits, and on the effectiveness of the current mandatory GHG reporting policy”.

In doing so, the government put forth an impact assessment which considers four potential options for a simplified energy and carbon reporting framework:

During the consultation period, the government engaged with stakeholders on the above options, putting forward its estimates on energy cost savings and improvements to “administrative burdens” whilst also inviting additional evidence on costs and benefits from respondents.

How things stand

With the consultation now closed, the government is currently analysing industry feedback and will come to a decision on what approach to take later this year.

As an organisation dedicated to helping UK businesses reduce their energy consumption, we regularly assist our clients with energy efficiency compliance – particularly in the energy and carbon reporting process. We therefore welcome the government’s endeavours to simplify and streamline this framework.

In our view – while reporting will indeed continue to play a vital role in achieving energy efficiency – the less time and effort required to measure energy consumption, the more resources businesses can make available for managing and reducing it.

We will accordingly be keeping a keen eye on developments and be the first to tell you about how to best manage the potential policy changes on the horizon.

If you would like more advice on energy efficiency compliance, or on how these changes may affect your organisation, do not hesitate to get in touch.