RenewableUK, the trade association representing the wind, wave and tidal energy industries, has strongly criticised the Chancellor’s budget announcement that he is retrospectively changing the rules governing the Climate Change Levy.
The green-tax break was originally designed to promote the generation of clean energy.
RenewableUK’s Director of Policy, Dr Gordon Edge, said: “The Chancellor’s announcement that renewable electricity will no longer be exempt from the Climate Change Levy is a punitive measure for the clean energy sector. Until now, Levy Exemption Certificates (LECs) generated as a result of the CCL have provided vital financial support for renewable energy producers.
“The Chancellor says the removal of the exemption will earn the Treasury £450 million in 2015/16, rising to £910 million in 2020/21.
“We’re suddenly looking at a substantial amount of lost income for clean energy companies which was totally unexpected. For example, Levy Exemption Certificates account for just over 6% of onshore wind generators’ revenues.
“The Government had already announced an end to future financial support for onshore wind – even though it’s the most cost-effective form of clean energy we have. Now they’re imposing retrospective cuts on projects already up and running across the entire clean energy sector.
“Yet again the Government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables”.
The UK was accused of being “out of step” with the times, environmental campaigners warned after a Budget that was lacking in measures to tackle climate change.
In the run up to crucial international talks in Paris, at which it is hoped a new climate treaty can be agreed, the only mention of the issue in George Osborne’s speech was on removing the climate change levy exemption for renewable power.
The Treasury said the removal of the exemption, which allows businesses not to pay the environmental tax levied on energy if it has come from renewable power, would prevent tax-payers’ money benefiting clean electricity generated abroad.
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