“Moving to an exemption of energy intensive sectors from the costs of renewables is enormously welcome and demonstrates that government is dedicated to finding a long term solution to this problem.
Ecotricity founder Dale Vince says “it’s madness” for the Government to exempt energy intensive industries (EII’s) from the cost cutting carbon emissions, given they are the biggest polluters, while at the same time taxing renewable energy generators for carbon emissions that they don’t even produce.
The cost of supporting renewables (the Renewables Obligation and Feed-in-Tariff schemes) is added to all energy bills. Yet manufacturers’ organisation, the EEF, says it has lobbied for big energy users to be exempted from these costs altogether – to help industries such as the steel, chemicals, aluminium and paper sectors.
Commenting on the statement by the Chancellor of the Exchequer, Terry Scuoler, Chief Executive of EEF, the manufacturers’ organisation, said: “The Chancellor’s enthusiasm for an industrial strategy for Britain is hugely welcome, as is his promise to continue to support Catapult centres, the successful incubators of new business ideas and product development. By moving to protect science and research spending, he will give industry confidence and encourage many innovative companies to push ahead with the next generation of business ideas.
“The EEF has estimated the move could save EII’s around £500m over the next 5 years and based on documents published by the Treasury, the EEF think this measure will add around £5 to annual consumer household energy bills instead, despite Government saying their priority on energy was to “keep energy bills as low as possible for hard working families”.
The exemption comes after the Government decided that Renewable Energy generators should pay the Climate Change Levy that was introduced to tax generators that produce polluting carbon emission – such as coal and gas power plants.
Vince added: “Amber Rudd said last week that large energy ‘generators should pay the cost of pollution’, yet today George Osborne is saying ‘large energy consumers should not’.
“Renewable energy generators now have to pay the climate change levy – designed to tax pollution that they don’t even produce – yet big polluters that do cause climate change are going to be exempt from paying to limit carbon emissions through renewable energy.
Vince concluded: “It’s madness.”