Legal Briefing

Four key developments in regulation shake-up

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Projects, energy and natural resources | 01 April 2010

The past month has seen the publication of some dramatic proposals and legislation that will significantly affect environmental and energy-based businesses. This article is devoted to four of these key developments.

The first one of these is the new civil sanctions regime. It will increase the options available to regulators and will provide alternative sanctions to criminal prosecutions in relation to environmental offences. This may well be a precurser to a change in approach to UK regulation in general and may lead to wider enforcement.

The second is the much-heralded and talked about Carbon Reduction Commitment Energy Efficiency Scheme (the CRC), which is a cap and trade emissions trading scheme that will apply to public and private organisations consuming a certain amount of electricity. The scheme is complex and there are registration requirements on the near horizon that businesses are having to deal with rapidly.

Finally, there are two interlinked and recent developments in the energy sector, namely the Feed-In Tariff Scheme (the FIT Scheme) and the Renewable Heat Incentive (RHI) financial support scheme. The driver behind the FIT Scheme is to promote small-scale, low-carbon electricity generation and it is designed to work alongside the Renewables Obligation. The RHI financial support scheme aims to motivate the generation of heat from renewable sources on all scales. Both measures are part of the government’s overarching renewable energy policy. These last two areas will be of interest to all energy users, individuals and suppliers.