On 7th October the Government published its response to the most recent consultation relating to Carbon Reduction Commitment and the final details of the proposed Scheme.
Following the consultation process there have been some detailed changes made but most of the key points remain the same. The headline issues from the point of view of the property industry are:-
- The Scheme has been renamed to the Carbon Reduction Commitment Energy Efficiency Scheme. This is simply to reflect the main objective of the Scheme which is to achieve a reduction in carbon emissions through increased energy efficiency.
- The first compliance year of the Scheme (April 2010 to March 2011) will now be a reporting only year. Each participant required to comply with the Scheme will now only have to purchase allowances for the year commencing April 2011 and will not retrospectively have to buy allowances for the period April 2010 to March 2011.
- Parent companies will now be able to elect that certain subsidiaries will participate separately in the Scheme rather than the parent company being responsible for them. This added flexibility may make it easier for institutional investors and property companies who own assets through a number of different vehicles to separately account for CRC emissions across their property portfolios.
- Under the latest proposed scheme landlords are still not allowed to transfer responsibility for compliance with the Scheme to their tenants. Over a third of respondents who commented on this proposal when it was first put forward disagreed with this approach primarily because it felt that landlords could not control or influence tenants' energy consumption. The Government has, however, decided to continue with its original approach as this is the simplest approach and it believes that landlords can influence the way their tenants use energy. In order to encourage tenants to work with landlords the Government is proposing to insert a specific provision in the CRC Energy Efficiency Order which requires tenants to cooperate with their landlords for the purposes of complying with CRC.
- The issue of apportioning cost of compliance with the Scheme is still left for the landlords and tenants to agree between themselves both in relation to existing leases and new lettings.
To access a full copy of the Government Response and the
detailed proposals please click on the link below:-
http://www.decc.gov.uk/en/content/cms/news/pn112/pn112.aspx
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 09/10/2009.