Real Estate Land Use, Planning and
Zoning Alert
26 October 2010
Authors:
Sebastian Charles
sebastian.charles@klgates.com
+44.(0)20.7360.8205
Steven Cox
steven.cox@klgates.com
+44.(0)20.7360.8213
Bonny Hedderly
bonny.hedderly@klgates.com
+44.(0)20.7360.8192
K&L Gates includes lawyers practicing out
of 36 offices located in North America,
Europe, Asia and the Middle East, and
represents numerous GLOBAL 500,
FORTUNE 100, and FTSE 100
corporations, in addition to growth and
middle market companies, entrepreneurs,
capital market participants and public
sector entities. For more information,
visit www.klgates.com.
CRC Energy Efficiency Scheme - Important
Update
The Government has announced an important change to the Carbon Reduction
Commitment (CRC) scheme. The change emerged in a single one paragraph
announcement issued by the Department of Energy and Climate Change, as part of
the wider Government Spending Review. The announcement simply stated that,
"The CRC Energy Efficiency Scheme will be simplified to reduce the burden
on businesses, with the first allowance sales for 2011-12 emissions now taking
place in 2012 rather than 2011. Revenues from allowance sales totalling £1
billion a year by 2014-15 will be used to support the public finances, including
spending on the environment, rather than recycled to participants. Further
decisions on allowance sales are a matter for the Budget process."
At this stage the DECC has not issued any further guidance. However it does seem
clear that participants in the scheme will still be expected to purchase allowances,
despite not subsequently receiving the benefit/incentive of any recycled payments
for performing well under the scheme. On a more positive note, participants should
now have the budget to spend on energy efficiency measures over the next 12
months. By getting rid of allowances payments in 2011, participants will be able to
invest that budget in other direct energy-saving measures.
Interestingly the announcement did not contain any detail or reference to the
Government's full intentions in relation to how the sale of allowances will now
function, nor did it deal with the League Table, both of which were linked to the
recycling payments. Also, perhaps to be expected, the Government did not specify
how the £1 billion would be spent. So, until the Government clarifies precisely
how the revised scheme will function, rumours and speculation will be rife.
Members of the real estate industry have described the change as a "green stealth
tax" and there has been much debate as to whether it will now be easier for
landlords to recover the "tax/costs" directly through "service charge" clauses in
leases.
Whatever the debate, and whatever emerges from the detail, the CRC scheme is
here to stay and as the September 30th deadline has passed, the UK does now have
its first mandatory carbon trading scheme. As a reminder, the initial phase of the
CRC is compulsory for organisations that consumed over 6,000 MWh (6,000,000
kWh) of half-hourly metered electricity during the period from January 2008 to
December 2008. At today's prices, this is roughly equivalent to total half hourly
electricity bills of approximately £500,000 per year.
Should you have any queries about the now existing CRC scheme, or the proposed
changes, which our K&L Gates CRC team are monitoring closely, please do get in
touch with one of the authors of this Alert.
Real Estate Land Use, Planning and Zoning Alert
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K&L Gates includes lawyers practicing out of 36 offices located in North America, Europe, Asia and the Middle East, and represents numerous
GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in addition to growth and middle market companies, entrepreneurs, capital market
participants and public sector entities. For more information, visit www.klgates.com.
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upon in regard to any particular facts or circumstances without first consulting a lawyer.
©2010 K&L Gates LLP. All Rights Reserved.
26 October 2010
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