Autumn budget 2018 - a summary
The following announcements from the Autumn Budget will affect business energy customers:
Carbon Price Support (CPS)
The Budget notes that the price of EU ETS allowances has risen recently, increasing the Total Carbon Price (currently made up of the EU ETS price and the CPS rate). Because of this, Government plans to freeze the Carbon Price Support rate at £18/tCO2 for 2020-21, though in the event of a no-deal Brexit the Total Carbon Price will increase to cover the removal of the EU ETS cost.
Carbon pricing following Brexit
If there’s a no-deal Brexit, the Government will bring forward a new Carbon Emissions Tax to meet the Climate Change Act (CCA) commitments. The tax would start on 1 April 2019, and would apply to stationary installations currently in the EU ETS. This includes power generators, some large industrial premises and manufacturers, some public sector facilities, and small emitters and hospitals that are subject to simplified reporting arrangements. A rate of £16/tCO2 would be charged if emissions exceed an annual allowance.
Climate Change Levy (CCL)
Enhanced Capital Allowances (ECAs)
ECAs and First Year tax credits for efficient technologies on the Energy Technology List and Water Technology List will end in April 2020. The resulting savings, (£315m) will go to a new Industrial Energy Transformation Fund, to support energy efficiency for ‘significant energy users’. ECAs for companies investing in Extra High Voltage (EHV) charge points for electric vehicles will be extended to 31 March 2023.
Improved messaging to regulators
The Government is also going to improve ‘messaging to regulators’ by publishing ‘Strategic Policy Statements’ to Ofgem, Ofcom and Ofwat.
You can the guidance document here and the full budget here.
You can read our latest regulatory report here