Carbon reduction scheme faces axe if reform fails

THE GOVERNMENT may adopt an alternative environmental tax to replace its scheme to cut corporate energy use if it cannot reduce the scheme’s red tape and admin costs, chancellor George Osborne said in his Budget statement.

The so-called Carbon Reduction Commitment (CRC) was devised under the Labour government but was yesterday slammed as “cumbersome” and “bureaucratic”.

The mandatory energy efficiency scheme forces businesses including banks, hotels, hospitals and schools to help cut Britain’s greenhouse gas emissions by 4m tonnes and corporate energy bills by £1bn a year by 2020.

The government will also raise a carbon price support rate for 2014-2015 by over 30 per cent to £9.55 per tonne of carbon dioxide from £7.28, the Budget document showed.

The levy comes into force in 2013 and is expected to raise £1.5bn for the Exchequer in 2016-17.