The Government will announce carbon tax breaks for a number of energy-intensive businesses in next month’s 'Growth Review’, it has been reported.
Ministers and officials are putting together a package of
carbon tax breaks for a "handful" of
manufacturing companies that operate in the
steel,
aluminium and
chemical industries as well as potentially the
ceramics sector, the
Financial Times has reported. They are to be announced in November’s so called 'Growth Review' introduced a year ago to assess policy that is holding back growth of
investment and hiring by business.
The move to roll back
green policy follows
lobbying from business group the CBI to exempt energy intensive companies from the Carbon Floor Price on the grounds that it risked tipping them "over the edge". Companies such as Tata Steel and Ineos have warned that UK climate change policies are threatening their
operations in the UK and could force them to move abroad. Manufacturers body EEF has also warned of the risk the Carbon Floor Price poses to some of its members.
The Carbon Floor Price will set a minimum price – £16 per tonne from 2013 – for emitting climate-warming carbon with the aim of encouraging more investment in low carbon energy.
According to the Financial Times, the relief package will "almost certainly" include a rebate that reduces the price of energy for the heaviest users.
Last month, Climate Change minister Greg Barker led an industry delegation to Germany, to see how that country’s carbon tax rebate system worked.
Back-tracking
]Despite promising to be the "greenest Government ever", in the face of a worsening economic outlook, Government ministers have been back-tracking on climate change policies because of concerns they may be putting UK growth at risk.
In face of manufacturers concerns over the damage climate change policies could do their competitiveness, Energy and Climate Change Secretary Chris Huhne promised in
May to introduce "a package of measures for energy intensive businesses" before the end of year .
At the Conservative Party Conference, last month, the
Chancellor George Osborne went further, attacking "a decade of environmental laws and regulations" and resolving that UK carbon emissions should be cut "no faster than our fellow countries in Europe", apparently toughening a stance taken earlier this year when the Government signed up to the fourth Carbon Budget, which proposes some of the world’s toughest carbon reduction targets. In a get-ou clause it said the policy would be reviewed in 2014.
Last month, manufacturers body EEF launched
a campaign to find alternative solutions to deliver green growth for Britain, claiming unnecessary burdensome
regulations and an inefficient raft of climate change policies meant the UK was losing the battle to invest in growth. An accompanying survey of senior manufacturing executives revealed the growing scepticism about Government green policies within the manufacturing sector, where 75 per cent of firms said they have seen the cost of environmental policies rise over the past two years.
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