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Britain Pays Compensation to Those Responsible for Air Pollution

Posted on by phlorum

The United Kingdom has started to pay millions of pounds in compensation to industrial firms, in an effort to protect them from higher energy bills due to European carbon permits, a government spokeswoman said in an email to Reuters, as cited by business news website Business Spectator.

The UK government has started to pay compensation to firms for the indirect costs of the EU Emissions Trading System (ETS). So far, a total of £16 million has been paid to 17 companies in Britain, said a spokeswoman for the Department of Energy and Climate Change.

The government wants to limit the impact of the new requirements under the EU ETS, which from this year has forced the majority of power generators to pay for carbon permits instead of allowing them to obtain one for free. Due to this, the UK government has set aside £113 million to cover compensation, she said.

The money is part of the allocation of £250 million for the next two years, which will aim to assist firms in paying for the indirect costs related to carbon requirements, including £100 million to help compensate UK’s domestic carbon tax.

UK utilities should submit carbon permits under the EU ETS for each tonne of CO2 they emit. The United Kingdom has set a carbon price limit, which is another difficulty for them. The UK government is hoping that the extra cost will boost low-carbon power generation investments.

Furthermore, the domestic tax is set at £4.94 per tonne this year, but it is expected to increase to £18.08 over the next two years, before increasing further to a level that will ensure that by 2020, power companies will pay a total of £30 per tonne of CO2 they emit.

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