Budget energy announcements receive mixed reaction
Chancellor Philip Hammond delivered his Autumn Budget on 29 October, including a range of announcements relevant to the energy sector.
The Climate Change Levy (CCL), a tax paid by non- domestic energy users in the UK to incentivise use of greener energy, was confirmed to 2020-21. The gas rate is to increase in 2020-21 and 2021-22 so it reaches 60% of the electricity main rate by 2021-22. Other fuels, such as coal, will continue to align with the gas rate. The discount for sectors with Climate Change Agreements will change to reflect this.
It was also confirmed that a Carbon Emissions Tax, imposed at £16/tCO2, would put in place in the event of a no deal Brexit to replace the EU Emissions Trading Scheme (ETS), which enables companies to trade the right to emit carbon. The UK’s top-up to the EU ETS – the Carbon Price Support – is to be frozen at £18/t of carbon but may be changed if total carbon taxes remain too high in the government’s view.
Businesses with high energy use, it was announced, would be able to benefit from up to £315mn of low- carbon transition funding. Also, companies which invest in electric vehicle infrastructure would be able to utilise Enhanced Capital Allowances tax breaks.
Chief Executive of energy industry organisation Energy UK Lawrence Slade said of the CPS freeze: “While it is not our preferred solution we are encouraged by the intention to maintain a carbon price signal in the case of a “no deal” Brexit scenario.” However, Labour Leader Jeremy Corbyn said the government had “failed abysmally to invest in the industries of the future necessary to tackle climate change”. The Renewable Energy Association described the budget as a “missed opportunity” for the government to show support for renewables...read more