Industry lobby groups are calling on the government to kill off the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.

The recent consultation by the energy and climate department (DECC) on reforming the CRC focuses on ways to keep it intact while simplifying its rules and requirements. Among the myriad options there seems to be a handful of frontrunners.

But in their consultation responses, trade associations including the manufacturers’ organisation EEF, the British Retail Consortium (BRC) and the British Property Federation (BPF) argue the CRC cannot be revived.

The fatal blow was struck in October when the Treasury turned the CRC into a tax by removing its revenue recycling mechanism. DECC’s simplification proposals do not seek to alter this.

The CBI’s budget submission calls on the Treasury to restore revenue recycling, if affordable. If not, the CRC should be replaced with a simplified mechanism to encourage energy efficiency.

But the likelihood of the Treasury giving up £1bn of CRC revenue seems remote given the state of the public finances.

The EEF complains its members face a “confusing patchwork of overlapping schemes” including the CRC, the EU emissions trading scheme (EU ETS) and the climate change levy (CCL) which “impose unnecessarily high compliance costs”.

It argues DECC should scrap the CRC and replace it with mandatory carbon reporting which the environment department (DEFRA) is considering introducing.

The British Retail Consortium says it can “no longer support the CRC in its current form and calls on the government to abandon the scheme”.

Without revenue recycling, it says, the CRC acts as a very inefficient way to gather a tax due to the administrative burdens of registering as a participant, reporting emissions and buying allowances.

It recommends extending the CCL to replace the CRC. Revenue would be collected much more simply through participants’ energy bills.

The British Property Federation, which represents property owners, also recommends withdrawing the CRC and increasing the cost of the CCL to compensate.

Although both the BRC and the BPF go on to discuss the simplification options in their responses and identify their preferences, it is clear they see this as just tinkering around the edges.

Can DECC go against such a united front of opposition and continue with the CRC? The four trade associations represent a sizable chunk of the 2,800 organisations in the CRC. Almost a quarter of participants are from the real estate sector alone, which is broadly represented by the BPF.

Or if it merges the CRC with the CCL, will the drive to raise the visibility of energy efficiency in the boardroom stall? Energy is a small proportion of most companies’ overall costs and a tax might make little impact.

The UK Environmental Law Association, which  supports the merger of the CRC into the CCL, says a solution could be to offer discounts on the CCL to participants that achieve verified emissions reductions – the same approach as for climate change agreements with energy-intensive sectors.

This might be difficult to replicate for the numerous private and public sector organisations under the CRC. Some experts have suggested that rebates could instead be offered to companies that achieve the Carbon Trust Standard or one of its equivalents which certify emissions reductions.

As if all this wasn’t enough, offset provider Carbon Retirement warns in its response that the CRC will fail to achieve any genuine emission reductions.

The problem is that if the CRC reduces UK energy consumption, electricity production will decline, freeing up EU ETS allowances for other companies to use.

Carbon Retirement says the solution is for the government to retire sufficient EU ETS allowances to match the emissions reductions achieved by the CRC, so they cannot be used by other sectors.

Either the government could retire the allowances from its national allocation under the EU ETS, or it could require CRC participants to buy and retire EU ETS allowances rather than CRC allowances.

So – lots for long-suffering DECC officials to think about…