UK may lower CO2 tax from 2021-22 if complete carbon value stays excessive

LONDON (Reuters) – Britain ought to search to scale back its carbon tax for energy mills from 2021-22 if the overall carbon value stays excessive, Treasury paperwork printed as a part of the nation’s price range confirmed on Monday.

The present carbon value help tax of 18 kilos ($23.03) per tonne will stay frozen for 2020-2021, as beforehand acknowledged, the doc mentioned.

Britain’s complete carbon value is at present made up of two levies with the home help tax paid by electrical energy mills on prime of obligations underneath the European Emissions Trading System (ETS), which forces firms to give up one carbon allow for each tonne of CO2 they emit.

EU carbon allow costs have greater than doubled this yr to round 17 euros ($19) a tonne, making the overall carbon value for British energy mills round 33 kilos a tonne.

However, within the event of a no deal Brexit in March, Britain would mechanically go away the EU ETS. Should that occur, the UK government mentioned on Monday it will introduce an additional Carbon Emissions Tax set at 16 kilos a tonne which might be payable by stationary installations at present within the EU ETS, comparable to energy mills and excessive emitting factories, from April 1, 2019.

“The new tax would maintain a stable carbon price for those stationary emitters currently covered by the EU ETS, providing stability for businesses and supporting the UK to meet its legally binding carbon reduction targets,” the government mentioned.

Britain has a goal to chop its carbon dioxide emissions by 80 % from 1990 ranges by 2050.

The government has mentioned beforehand that it’s contemplating 4 carbon pricing choices for Britain when it leaves the European Union subsequent yr.

Reporting by Susanna Twidale; Editing by Adrian Croft and Kirsten Donovan

Our Standards:The Thomson Reuters Trust Principles.

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