Protection from carbon tax for UK industry
In the UK Autumn budget statement yesterday, George Osborne annouced that energy-intensive industries in the UK will receive £252mn until 2015 to help shield them from the effects of the government's energy policy on the costs of electricity.
According to a spokesperson for the department of businessk innovation and skills, energy intensive industries which trade abroad will be prioritised for the fund. The government aims to minimise “the carbon leakage which might happen if investment relocated abroad”.
As part of the fund, energy intensive industries will receive £40mn between April 2013 and April 2014, and £60mn between April 2014 and April 2015 to offset the cost of the carbon tax introduced as part of the UK's electricity market reform.
The government will also use £12mn from the fund to compensate key electricity-intensive businesses to help offset the indirect cost the EU emissions trading scheme (ETS) in the 2012 tax year. The compensation for EU ETS will step up to £50mn/yr between April 2013 and April 2015. The fund will be subject to state aid guidelines and be available until the end of the spending review period in 2015.
The UK government plans to look at further options for reducing extra electricity costs which come as part of the electricity market reform. The government will “increase the level of relief from the climate change levy on electricity for climate change agreement participants to 90pc” through £20mn/yr between April 2013 and April 2015.
The UK has opted to introduce a minimum carbon price for UK installations that are part of the EU ETS, arguing that EU allowance prices are not high enough to incentivise investment in low-carbon technology.
If you would like more information on how this fund could affect your business, please contact us at info@uesenergy.co.uk.
Source: Argus Media
