Osborne’s 2016 budget and the UK’s energy and environmental policies

Osborne's 2016 budget and the UK's energy and environmental policies

The Chancellor of the Exchequer, George Osborne, today delivered the 2016 Budget.

Amongst the announcements made, Osborne stated that businesses find the CRC energy efficiency scheme a burden and for this reason he will scrap the scheme and, in parallel, he will raise rates on the Climate Change Levy (CCL) from 2019.

Analysis of the budget documents highlights the following key areas which effect the UK’s Energy and Environmental policies:

Reforming business energy efficiency tax

  • The CRC energy efficiency scheme will be scrapped, following the 2018-19 compliance year. No purchase of allowances are required to cover emission for energy supplied from April 2019.
  • From April 2019, the main rates of the CCL will increase. To protect the most energy intensive sectors, the CCL discount available to Climate Change Agreement (CCA) participants will increase from April 2019.
  • The government will consult later in 2016 on a simplified energy and carbon reporting framework, to be introduced in April 2019.


  • Over the next 5 years, at least £50 million will be allocated for innovation in energy storage, demand-side response and other smart technologies.
  • The government will publish a small modular nuclear reactor (SMR) delivery roadmap later in the year, and will spend at least £30million to develop nuclear skills capacity.

Other energy and environmental announcements

  • An additional £700 million will be spent on flood defence and resilience programmes.
  • Tax cuts for the oil and gas industry backdated to 1st Jan 2016. 


To find out what this could mean for you or if you have any questions, feel free to drop us a line.



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