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Updated Mar 22, 2012

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CRC to be scrapped?

The Carbon Reduction Commitment (CRC) could potentially be replaced by an "alternative environmental tax" if it can't be simplified, Chancellor George Osborne announced this week.

In comments made during the 2012 Budget, Mr Osborne criticised the CRC, introduced by the Labour Government in 2008, for being "cumbersome" and "bureaucratic" and suggested he wanted to lighten the burden on businesses. Under the mandatory CRC Energy Efficiency Scheme, large public and private sector organisations such as supermarkets, water companies, banks and local authorities must report on their energy use and emissions. If they do not comply with the scheme they can be fined and face other penalties.

The Chancellor said, "The Carbon Reduction Commitment was established by the last Government. It is cumbersome, bureaucratic and imposes unnecessary costs on business so we will seek major savings in the administrative cost of the commitment for business. If those cannot be found I will bring forward proposals this Autumn to replace the revenues with an alternative environmental tax."

The Department of Energy and Climate Change (DECC) will be bringing out full details of how they want to simplify the CRC soon, and a formal consultation will be launched to give businesses a chance to have their say.

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