Lawmaker Duncan calls for end to UK carbon floor price

Published 10:10 on April 5, 2016  /  Last updated at 17:35 on April 5, 2016  /  EMEA, EU ETS  /  No Comments

UK MEP Ian Duncan has urged for the country's carbon floor price to be abolished in order to give relief to the stricken British steel sector.

UK MEP Ian Duncan has urged for the country’s carbon floor price to be abolished in order to give relief to the stricken British steel sector.

He tweeted on Tuesday that he will write to UK business minister Sajid Javid calling for the scrapping of the policy, which has been in place since 2013 and charges thermal power stations an additional emissions fee on top of their EU ETS obligations.

Duncan is a member of the ruling UK Conservative party and is also steering post-2020 EU ETS reforms through the European Parliament.

On Monday, Carbon Pulse reported that the UK’s carbon floor price is coming under closer scrutiny as a potential suitor for part of Tata’s UK steelmaking operations said its interest depends on the government rolling back the policy.

Despite its relatively light impact on the steel industry’s current woes, altering the UK’s energy and climate policy would be one of the few levers available to lawmakers to address the situation, as they have less influence on other, more decisive factors such as global steel prices or currency rates.

“Other factors not wholly in hands of [the UK government]. This tax is,” Duncan said, adding that steelmakers were given compensation for some, but not all, of the costs from the floor price via higher energy bills.

Analysts have attributed the floor price to incentivising utilities to switch from burning coal to cleaner gas and to driving big emission cuts over the past two years, something that the EU ETS price alone has mostly been too low to achieve.

Environmental campaigner group Sandbag was disappointed by Duncan’s views, pointing to the deep emissions cuts achieved under the floor price.

By Ben Garside – ben@carbon-pulse.com

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