The Treasury is at the centre of a row over the future of its carbon tax, as it faces calls from some energy giants to increase the green levy, and from manufacturers to freeze or even scrap it. The ‘carbon price floor’, introduced in 2013, charges fossil fuel power plants for their carbon emissions. It was intended to act as a modest UK ‘top-up’ to European carbon prices, with the combined level rising every year to 2030. But in 2014 the Chancellor announced the top-up would be frozen at 2015-16 levels until 2019-20, because European carbon prices were so low the UK tax was putting British industry at a competitive disadvantage. The Treasury is now understood to be deciding whether to freeze or increase the tax in 2020-21. Several major energy suppliers including EDF and Centrica are understood to be urging the Treasury to commit to an increase.
Telegraph 23rd Jan 2016 read more »