June 30, 2011 / 11:02 AM / 8 years ago

UK government seeks to simplify carbon trade scheme

LONDON (Reuters) - The British government outlined proposals on Thursday to simplify its corporate carbon reduction scheme in response to criticism from businesses for its complexity, cost and bureaucracy.

The Carbon Reduction Commitment (CRC) was launched in April last year to reduce carbon emissions of businesses through energy efficiency improvements.

UK businesses using more than 6,000 megawatt hours of electricity per year must monitor usage and report their emissions annually. From 2012, they will have to estimate future emissions and buy carbon permits under the scheme.

However, the CRC has been criticized for being too complex, and overlapping with the EU’s emissions trading scheme (EU ETS) and UK government policies.

“Businesses have made clear to me their serious concerns about the overly complex and bureaucratic CRC scheme,” climate change minister Greg Barker said in a statement.

“We’ve got to help business reduce their emissions, not strangle them in red tape,” he added.

Among the proposals, the government has suggested reducing the number of fuels covered by the scheme to four from 29, simplifying the organizational rules and making qualification processes easier.

It also proposed establishing two carbon permit sales a year from 2014 where the price of permits is fixed, instead of setting an emissions cap and holding annual auctions.

“This would remove the need for businesses to come up with auctioning strategies and give price certainty to help investment decisions,” the UK’s department for energy and climate change said in a statement.

The government is also proposing to reduce the overlap with other schemes by exempting sites which already comply with ‘climate change agreements’ and the EU ETS.

The scheme’s participants are encouraged to comment on the proposals, the government said. There will be a formal consultation on the plan next year.

Reporting by Nina Chestney; editing by Jason Neely

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