Energy and climate change regulations reforms will save businesses £400m, says Government

Announcing the changes today, Energy Minister Charles Hendry said the overhaul would help drive growth and stimulate investment in the UK’s ageing energy infrastructure. And he added that together with reform of the European Emissions Trading Scheme and the Carbon Reduction Commitment (CRC), they would help businesses save hundreds of millions of pounds. 

But the reforms will fall short of the overhaul to environmental and climate change regulations that some business sectors have been calling for. Both the CBI and the manufacturers’ body, the EEF, want to see the CRC scrapped and the UK’s environmental and climate change regulation regime further simplified.

Among the regulations the Department of Energy and Climate Change (DECC) said today it would be amending are the Climate Change and Sustainable Energy Act 2006 to better reflect renewable technologies covered under microgeneration and the Offshore Chemicals Regulations 2002 , which will be streamlined to "improve functionality and reduce costs" for offshore renewable installation operators.

DECC said it would also be scrapping 10 regulations associated with energy efficiency, 15 related to gas and electricity supply, 10 affecting nuclear security and nuclear energy and 14 associated with onshore and offshore energy infrastructure. However, the most cuts are to be reserved for the coal industry, where a total of 37 measures are to go – almost 60 per cent of all coal-related regulations. 

"Energy is vital to the economy and essential to driving growth. Our reforms aim to stimulate over £100 billion of new investment in the electricity sector and could support around 250,000 total jobs in electricity to 2030," said Hendry. 

"It is therefore vital that we have a regulatory regime which promotes fairness and consumer and environmental protection, but does not impose unnecessary costs or barriers to generating the necessary investment, innovation and skills we need to build the low carbon economy. 

 
"The Red Tape Challenge has provided the opportunity to ensure we continue to meet these objectives. We have listened to our stakeholders as they suggested regulations which add cost or complexity without effectively leading to protections, and I am pleased to announce that DECC will scrap or improve 134 regulations."

In March, as part of the Red Tape Challenge, Environment Secretary Caroline Spelman announced her department would be slashing 185 green regulations out of a total of 255.

Commenting on today’s reforms, Terry A'Hearn of green lobby organisation the Aldersgate Group, said cutting back outdated energy regulations would help correct "market failures" and help drive jobs and growth. "We congratulate DECC's recognition of the importance of prioritising these long-term outcomes," he said.

David Porter, chief executive of Energy UK, which represents the big energy suppliers, also welcomed the reforms, but called for more changes. "We would urge DECC to continue to remove unnecessary red tape, and to continue to improve legislation, as getting future energy policy right is more critical than ever," he said.

DECC said it will publish its response to a consultation on simplifying the CRC in the autumn.