CIS reflect on “Mandatory GHG reporting retained in Budget”

The government’s response to the consultation on “Reforming the Business Energy Efficiency Tax Landscape” was release last week, and has been met with mixed responses.
It is positive to see that Mandatory Greenhouse Gas Reporting looks set to remain, the structure of which will be consulted on later this year, although an ESOS style approach is most likely as the response details that annual reporting will be extended to cover the full ESOS participant population (subject to a de-minimis).
 This has also signalled the widely anticipated end to the CRC which will not continue beyond the completion of the current compliance phase in 2019. This however will leave a tax revenue gap which the government intends to fill by increasing Climate Change Levy, particularly for commercial gas supplies.
 This could potentially have implications for those looking to install Gas fired CHP systems. Where previously, the move to localised generation of electricity through increased gas consumption resulted in carbon reductions and therefore lower tax liabilities under CRC, the new framework will in fact penalise increased natural gas consumption.
 This seems to be in conflict with wider development policies which encourage development of Natural Gas CHP led district heat networks, and to some extent seems to disconnect government energy taxation policy with the carbon emissions it was designed to abate.
 Further detail is likely to be released in due course and CIS will look to provide input to DECC’s consultation on the format of mandatory carbon reporting in the summer.
23rd March 2016