Sharp hike for carbon floor price
The Government has set the 2014-15 carbon price support rate at £9.55 per tonne of carbon dioxide equivalent.
This is a sharp increase on the £4.94 C02e for 2013, set one year ago.
The CBI's director general John Cridland warned that the rise will hit UK energy-intensive businesses hard, underlining the need for a ‘more coherent strategy’ to unlock low-carbon industrial growth.
He said: "In the meantime, we urgently need support to those companies most at risk from the increase."
However the increased rate, included in the 2012 Budget document, reflects the decline in traded carbon prices and is in line with expectations according to the low-carbon campaign group Sandbag.
"Thanks to the decline in the EU carbon price the top up price (today's
£9.55 rate) that will have to be paid in the UK more than doubles the
carbon price here compared to our EU neighbours," said Sandbag's Rob Elsworth.
"The Treasury should abandon the Carbon Floor Price in favour of strengthening the carbon price at an EU level, which would help to incentivise low carbon investment while ensuring the UK remains competitive."
How the Treasury will use the increased income remains unclear.