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Government asks businesses for energy data to support £250m green policy relief

Green policy news – by GreenWise staff
12th March 2012
The Government has today called on companies and trade bodies to provide it with information and data to help shape a £250 million scheme aimed at shielding the UK’s most electricity-intensive industries from the rising cost of green policies.
The Chancellor of Exchequer announced in his autumn statement that the Government would introduce a series of measures to alleviate electricity bills of energy intensive companies, such as steel mills, aluminum smelters and paper manufacturers. The £250 million Energy Intensive Industries Package is due to be introduced in 2013 and include, among other things, compensation for some companies from the Government’s carbon floor price.

The Government said it was launching today's call for evidence to ensure the financial relief was targeted at those companies that needed it most.

"As we manage the transition to a cleaner energy mix, it’s important that we are alive to adverse impacts felt by energy intensive industries which face tough competition overseas," Energy and Climate Change Secretary Edward Davey said. "The evidence we are calling for today will help us to target the financial support we have available to those businesses that need it most."

According to the Government, energy and climate change policies may add up to 28 per cent in 2020 on average electricity prices paid by large energy intensive users.

Last year, Rio Tinto blamed the closure of an aluminium smelter factory in the North East on new carbon taxes and Tata Steel said green taxes were a big factor in its decision to cut up to 1,500 British jobs in Scunthorpe and Teesside.

Protecting competitiveness
Through the relief package, the Government says direct financial assistance will be targeted to the most energy-intensive businesses whose competitiveness may be affected. It will include higher relief from the climate change levy as well as compensation on the cost of the carbon price floor and the EU Emissions Trading System. The Treasury is also looking at ways to protect electricity-intensive industries from the costs arising from electricity market reform policies where it could impact significantly on their competitiveness. 

"The Government is committed to ensuring that manufacturing is able to remain competitive during the shift to a low carbon economy," Business Secretary Vince Cable said today.

The call for evidence asks companies and trade bodies to share information and data about their energy intensity. Once sufficient data is gathered, the Government said it will formulate policy, consulting in September this year.

Businesses interested in providing evidence are asked to visit www.bis.gov.uk/carbon-price-floor-compensation.

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