The email was prepared by Craig McKinley, Chairman of the Net Zero Scrutiny Group. Photo: Belinda Jiao
'Hidden tax' Conservative MPs say they need to cut an additional £84 on electricity bills to help needy households.
Companies that generate energy by burning gas for production of electricity, charge a fee for every tonne of carbon they produce, in line with the government's decarbonization policy to help the country reach its net zero goal.
Value is inherited. households through their energy supplier, potentially up to £84 a year at current rates, according to analysis in a letter signed by 33 Conservative MPs and their peers calling for carbon cost reform.
New figures It's time for Rishi Sunak to help households struggling with rising mortgage rates, persistently high energy prices and an inflationary spiral pushing prices up.
The letter, prepared by Craig McKinley, chairman of the Net Zero Scrutiny Group, said the UK's carbon trading scheme “could add up to £84 to household bills annually; hidden tax during the cost-of-living crisis.»
Mr McInlay said carbon costs should come down as current policies «do nothing to improve our environment.»
>On Sunday, The Telegraph reported that the government would reintroduce green fees from July that would add £170 to households' annual electricity bills and include costs for insulation schemes and old wind farm contracts.
The day before, Grant Shapps, Energy Security Minister, told the Telegraph that households would be exempt from taxing their electricity bills to fund the hydrogen industry.
Sir Jacob Rees-Mogg, former Energy Secretary, and Sir Ian Duncan-Smith , the former leader of the Conservatives, were among those who signed a letter stating that electricity generators that generate electricity from gas reduce the cost of carbon emissions imposed on them. From government to households.
«Even though the ETS was intended to encourage the industry to decarburize, costs have skyrocketed,» they warned.
Sir John Redwood, Theresa May's Environment Minister, who also signed letter, stated that carbon spending should be put on hold until the energy burden on households and businesses is reduced.
“Carbon dioxide is a global problem, not a national problem,” he said. “We import things that require a lot of CO2 and claim that this has nothing to do with us.”
“Carousel of taxes and subsidies”
He said that the pressure on the industry “created taxes and a carousel of subsidies” .
In January, the government offered the steel industry £600m in support to help it switch to cleaner technologies amid plans to cut hundreds of jobs.
«I would put it on hold until energy prices fall and markets become more stable, and then you can think again,» he said.
He added: «We are in disadvantageous position compared to all major industrial producers. China, Germany, America are big industrial producers and would never dream of burdening themselves with very high carbon taxes like we do.”
The Emissions Trading Scheme was established in January 2021. and largely reflects the ambitious EU system that the UK was part of before Brexit.
The costs to industry in the UK have been higher over the past two years, although they have come down compared to the EU over the past two months.
According to the scheme, a set amount of credits representing a tonne of carbon is sold by heavy industry, power generation and domestic aviation to pay for their emissions.
The government is also providing a limited amount of free carbon credits meant to drive prices down and prevent industries from leaving the UK. for cheaper markets.
But it has been proposed to reduce this 30-35% by 2024. The steel industry said the decision would increase costs because it cannot cut its emissions fast enough with current technology.
“This is an existential threat to some of our members,” said Frank Aaskov, manager of energy and climate change policy at UK Steel. «Current proposals aim at decarbonization through deindustrialisation.»
«This also means higher electricity prices in the UK as the electricity sector participates in the UK emissions trading scheme.
» This means that if emissions prices are higher here in this country, then electricity prices will also be higher.” the impact on electricity bills “cannot be easily assessed.”
But he said it was negligible compared to the huge cost of wholesale gas, which has risen sharply since the invasion of Ukraine.
— dependency on fossil fuels. with companies importing into the country, which is being considered by the government.
Mr Crane-McGreene said carbon pricing is «the most efficient way to cut emissions in the economy» and a key element of the government's zero emissions plans.
«Due to the protracted gas crisis, which should keep household electricity bills up to the end of this decade at around 50% higher than before the gas crisis, the UK needs tools like carbon pricing to reduce our chronic overdependence on fossil fuels and lessen the impacts of the current crisis and the inevitable next,” he said.
A government spokesman said: “The Emissions Trading Scheme is a key element of our approach to combating climate change, acting as a market-based incentive to decarbonize businesses and giving them confidence to invest in new technologies.
“In The EU also operates an equivalent emissions trading system, with prices in the EU currently higher than in the UK.
“We consulted on proposals for a smooth reduction of the limit through the issuance of additional allowances, and enterprises actively participated in the development of the scheme. We will answer that in due time.”
Want to make the UK more competitive? Let's reduce the cost of carbon emissions
Given the myriad of challenges facing our country, from unsustainable energy bills to nearly 40-year high inflation; from endless strikes by militant unions to weak economic growth, the last thing the government should pursue is a policy that will harm our great British industry.
Unfortunately, this is the likely outcome if the government continues to force British firms to bear some of the highest carbon costs in the world.
The UK Emissions Trading Scheme (ETS) was set up by the government after we left the EU. An even more expensive and inefficient copy of the EU's own misguided scheme, the ETS is designed to charge industry for the carbon it produces while encouraging cleantech investment.
However, many of the technologies currently being discussed to reduce industrial emissions, such as hydrogen and carbon capture, remain a far-fetched dream and will not be available for many years, if at all. The ETS has just become yet another onerous and costly business tax, hurting our country's economic growth and competitiveness. Ironically, this is sucking money out of energy-intensive companies, preventing them from investing in reducing CO2 emissions.
Worse still, if government proposals are accepted, we will see further growth on an already record high prices.
If a business in the UK has to pay more than competitors in other countries, including those in the EU, for the production of the same product, such as steel, cement or fertilizer, it will be at a disadvantage in world market.
With underpriced prices and having to incur significant costs affecting their profits, the only logical outcome for UK businesses supporting many communities across the country — our steel mills, cement works, pottery and other manufacturing industries — would simply be to close shop here in the UK . and export jobs abroad.
While Whitehall bureaucrats will applaud the resulting emission cuts, who will count the loss of thousands of good British jobs in Scotland, the Midlands, Wales and the North? Who will be responsible for the flight of investments from the economy? As factories, potteries and factories close, how will we address the growing gaps in our energy security?
Even more disappointing is that such an outcome does nothing to improve our environment. While emissions in the UK will fall, there is no guarantee that the fall will be greater than emissions generated by foreign companies free of schemes like ETS.
We will still need to import the same products — metals, petrochemicals and more — from far away. This
means that all we will do is pass on our emissions to our economic competitors, who have lower environmental standards.
By leaving the EU, we have a great opportunity to develop policies which works best. for British businesses and workers. Policies that could help us improve our natural world as well as «level» our regions and boost economic growth.
I'm afraid to say that the current version of ETS just means «level down», lost jobs and lost investment while doing nothing to reduce emissions.
In a post-Brexit world where the UK needs to be flexible and competitive, this is simply unacceptable.
Craig McKinley MP for South Thanet and Chairman of the Net Zero Research Group
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