Business groups have welcomed the Victorian government's decision to end a mandatory energy efficiency program almost two years early in a bid to end unnecessary duplication with the carbon tax and a similar national scheme.

Victoria's Environment Protection Authority last week began informing the 250 or so companies required to comply with the Environment Resource Efficiency Plans (EREP) that identifying and implementing energy and water efficiency improvements would now be voluntary.

The state government brought forward its sunset date from the end of 2014 to now “to reduce the compliance burden on businesses due to duplication with current Commonwealth programs, including the Energy Efficiency Opportunities program and the carbon price”, the EPA said in a letter to participants.

The plan affected sites in the state using more than 100 terajoules of energy and/or 120 megalitres of water per year. The federal scheme covers about 200 large firms using 500 terajoules or more of energy annually.

“There's no longer the need for the EREP as there once was,” Tennant Reed, principal national advisor for the Ai Group, said, noting that soaring prices for electricity - and soon gas - has made energy management more of a priority.

The program, which required companies to act on projects with a payback period of three years or less, had helped raise awareness of energy productivity issues, Mr Reed said.

Rob Murray-Leach, chief executive of the Energy Efficiency Council, said ending state programs made sense provided the national scheme is retained, if not strengthened.

"We support replacing EREP with the national Energy Efficiency Opportunities program, but they have to put more resources into EEO to make sure that smaller businesses don't face soaring power bills,” Mr Murray-Leach said.

Victoria's scheme had helped many firms save money but was less effective than the federal program in assisting them to understand and manage energy use, he said, adding that many companies had considerable scope for improvement.

“Australian companies lost a lot of expertise in managing energy when energy was cheap,” he said. “Energy prices have risen rapidly, putting Australian businesses at a competitive disadvantage to their overseas rivals."

A spokesperson for Greg Combet, minister for climate change and energy efficiency, also welcomed the Victorian government's move – with a caveat.

“We're encouraged that states are looking to reduce duplication and regulatory burden for business. However, this should not be an excuse for cutting programs to prop up state budgets.”

Information and a range of tools from the EREP program, meanwhile, will continue to be available on EPA Victoria's website for firms wishing to continue to participate.