The United Kingdom is phasing out an exemption to its climate change tax that has been available to renewable energy suppliers since 2001, leading one major biomass pellet producer to lose 28% of its share value.
“The levy was introduced in 2001 to encourage producers to increase renewable energy generation and to support businesses in reducing harmful carbon emissions,” Reuters reports. “So far, users and suppliers of green energy had been exempt from paying the tax. The exemption will end on August 1.”
Chancellor of the Exchequer George Osborne said the exemption “was outdated and was channelling tax relief to green energy producers outside of the UK who export electricity to Britain via subsea interconnectors,” Schaps and Chestney write.
“We are displeased with this retrospective change to a support regime that was there to encourage green energy and which would have underpinned many renewable investment decisions,” said a spokesperson for bioenergy producer Drax, which expects to loss £30 million in earnings this year and £60 million next year as a result of the change.
Osborne’s budget included measures to encourage oil and gas investment in the North Sea, along with a promise to establish a sovereign wealth fund with royalties from shale gas extraction. (h/t to iPolitics for pointing us to this story)