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Retrofit market could suffer as ‘complex’ carbon trading delayed

Senior industry figures have questioned the government’s commitment to green initiatives after energy secretary Chris Huhne delayed the implementation of the carbon reduction commitment energy efficiency scheme.

The scheme is expected to create a swathe of retrofit and refurbishment work by requiring registered companies to pay a ‘carbon tax’ in line with their usage.

It was altered during the Comprehensive Spending Review when the Treasury announced it would be keeping the revenues raised, instead of recycling the money back to the organisations taking part. Speaking at a CBI climate change conference this week, Mr Huhne admitted the scheme had become overly complex, and announced the suspension of the carbon trading section of it.

“This will mean participants won’t need to register for phase II until 2013,” he said. “This will create a window for us to engage in a proper dialogue with participants about what we need to do to improve it.”

Industry experts said the move would mean clients interested in carrying out retrofit and green refurbishment jobs deferring the work in order to avoid the tax, leading to further inactivity.

Electrical Contractors’ Association head of safety and environment Paul Reeve said: “The problem with changing like this is that it damages confidence - it makes people ask, is the government serious about this?

“This in turn creates inactivity. This isn’t restricted to the CRC either. It has a knock-on effect that will include renewable heat incentives and feed-in tariffs.”

Bob Towse, head of technical and safety at the Heating and Ventilating Contractors’ Association, said: “Putting off the CRC just tells the world we aren’t committed. Anything that delays the process hints the government is not serious, so the rate of change slows.”

But Mr Reeve said: “Firms should be taking every opportunity to retrofit anyway so they are in better shape when the CRC does come into play.”

Richard Lambert, director-general of the CBI, said: “We are going to have to raise our game substantially in the next few years.

“The cost of inaction will rise exponentially if we continue on a course of business as usual. The risk to our energy supplies, unless properly addressed, will seriously undermine the attractions of the UK as a place to invest.”

Mr Huhne defended the decision to axe the ‘revenue recycling’ component of the scheme, turning it into what critics called a “green stealth tax” expected to raise up to £1 billion a year.

He told the CBI: “We share many of your concerns about the CRC. That is why we have made a commitment to simplify it.”

 

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