Skip to main content
Back to Closed Consultations

Review of the business energy efficiency tax landscape

Improving business energy efficiency can boost business productivity, support growth, improve security of energy supplies and help decarbonise the economy. At the Summer Budget, the government announced it would review the business energy efficiency tax landscape and consider approaches to simplify and improve the effectiveness of the regime. 

Objectives of the consultation

Following the announcement of a review of the business energy efficiency tax landscape at the Summer Budget, this consultation sought evidence and set out policy proposals to simplify and improve the effectiveness of the landscape in supporting the government’s objectives around simplicity, productivity, security of energy supplies and decarbonisation. 

This review considered the interactions between business energy policies and regulations, including the Climate Change Levy (CCL), the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), taxes on other fuels – e.g. heating oils, Climate Change Agreements (CCA), mandatory greenhouse gas (GHG) reporting, the Energy Saving Opportunity Scheme (ESOS), Enhanced Capital Allowances (ECAs), and the Electricity Demand Reduction (EDR) pilot.

The proposals in this consultation set out approaches to improving the effectiveness of the policy framework by:

  • simplifying reporting and taxes to reduce administrative burdens;
  • targeting policy levers at cost-effective energy efficiency potential identified in business sectors and heat use;
  • using policy instruments to help raise the profile of energy efficiency and carbon reduction with decision makers; and
  • improving the case for investments in energy efficiency and low carbon alternatives.

As part of the overall policy-making development, previous engagement with businesses, academics and other bodies took place prior to this consultation in order to create an evidence base and, depending on the outcome, the government will follow with further communication and discussions with interested groups.

This consultation closed on 9 November 2015.

Supporting papers

To download the consultation document, please follow the link below.

CIBSE response

CIBSE supports the proposal for simplification of the existing system of overlapping policies. Care will, however, be needed to combine and retain the most successful elements of the existing policies, rather than disregarding them. It is essential to focus on the overall objective of improving business energy efficiency to boost business productivity, support growth, improve security of energy supplies and help decarbonise the economy.

CIBSE believes that mandatory reporting is a key element of any energy efficiency activity. A consistent format of reporting for business energy use will help to ensure transparency, equality and comparability between organisations and to underpin market efficiency.

CIBSE considers that government should develop a single reporting scheme requiring all ESOS participants, including public sector, to report regularly at board level. Reports should include energy consumption and costs, CO2 emissions, renewable energy generation, reduction targets and achievement, and completed energy audit actions. Performance indicators appropriate to the organisation should also be covered.

To read the full CIBSE response please follow the link below.

Results of the consultation and next steps

The Government published its response to the consultation on a review of the business energy efficiency tax landscape  on 16 March 2016. The document summarises the responses received and sets out the Government’s decision on how to proceed. To read the Government response please follow the link below.

Share this page