Home > Latest News > Environmental Health > Environmental Protection >

Budget Brings Changes to Climate Change Levy

July 9, 2015
Environmental Protection

wind farm v2Chancellor of the Exchequer George Osborne used his budget speech to announce the removal of the climate change levy exemption for renewable energy suppliers. The exemption, which was originally introduced in 2001, allowed renewable energy generators to supply businesses and the public sector without being subject to the climate change levy applicable to other suppliers. The original aim of the scheme was to increase the demand for renewable energy.

A transitional arrangement will be introduced meaning that suppliers can still claim exemption from the levy for any electricity produced prior to August 1st. The move has been criticised by environmental organisations, with former Green Party leader Caroline Lucas saying; “This is a serious blow for the fight against climate change. We’ve seen yet another example of reckless short-term policy making that prioritises the profits of polluters over the public interest in a safe and habitable climate.”

Lobby group Renewable UK said the changes would cost green energy producers around £450 million in the current financial year, and up to £1 billion by 2020-2021.

The Chancellor also confirmed that £1.3 billion in support for the oil and gas industry before 2020 announced in March was still scheduled to go ahead as planned. Despite the criticism, Mr Osborne insisted that the government would still promote low carbon investment and that ministers would be pushing for a deal to limit global warming below two degrees centigrade at the United Nations Conference on Climate Change in December.