Carbon Floor Tax to Hit TATA Steel?
24 March 2011 by Hamst
It is reported that steel giant TATA could be forced to leave the UK if plans to introduce a new super tax on heavy industries that are reliant on carbon based fuel get the go ahead later. Chancellor George Osborne is expected to provide fresh details on how the coalition government will impose a floor price on carbon emissions designed to bolster the economic case for low carbon renewable, nuclear and carbon capture and storage projects in his budget.
TATA Steelworks in Scunthorpe
According to industry and government sources, a new carbon floor price will provide a large revenue stream to the exchequer and will be used to subsidize all forms of renewable energy, including nuclear power.
Secretary of the All Party Steel Group, Ms Nia Griffith MP, claims the plans would put a new burden on the steel industry, by levying a charge on any carbon based fuel, such as coal, oil or gas that is used to generate the electricity that they use.
It is understood that TATA Steel could face tens of millions of incremental costs to UK steelmaking, those costs are not faced by its European competitors, let alone by its global competitors. The real worry is that the proposed carbon floor tax would make the UKs uncompetitive even compared to our European competitors and will drive TATA to invest elsewhere.
Karl-Ulrich K�hler, the managing director and chief executive of Tata Steel�s European operations, has said the carbon floor price represented �a potentially severe blow to the sustainability of UK steelmaking�.
�The proposal will impose additional unilateral emission costs specifically on the UK steel industry by seeking to artificially ensure that these costs cannot fall below government-set targets which no other European country will enforce,�.
Steel group MPs are keeping the pressure up on Government ministers through parliamentary questions and have secured time for a debate on the carbon floor price later.
It is unclear if the Government will announce the precise floor price it intends to impose or when it plans to bring the floor price into effect, particularly given that any significant increase will lead to a hike in energy bills.
TATA Steelworks in Scunthorpe
According to industry and government sources, a new carbon floor price will provide a large revenue stream to the exchequer and will be used to subsidize all forms of renewable energy, including nuclear power.
Secretary of the All Party Steel Group, Ms Nia Griffith MP, claims the plans would put a new burden on the steel industry, by levying a charge on any carbon based fuel, such as coal, oil or gas that is used to generate the electricity that they use.
It is understood that TATA Steel could face tens of millions of incremental costs to UK steelmaking, those costs are not faced by its European competitors, let alone by its global competitors. The real worry is that the proposed carbon floor tax would make the UKs uncompetitive even compared to our European competitors and will drive TATA to invest elsewhere.
Karl-Ulrich K�hler, the managing director and chief executive of Tata Steel�s European operations, has said the carbon floor price represented �a potentially severe blow to the sustainability of UK steelmaking�.
�The proposal will impose additional unilateral emission costs specifically on the UK steel industry by seeking to artificially ensure that these costs cannot fall below government-set targets which no other European country will enforce,�.
Steel group MPs are keeping the pressure up on Government ministers through parliamentary questions and have secured time for a debate on the carbon floor price later.
It is unclear if the Government will announce the precise floor price it intends to impose or when it plans to bring the floor price into effect, particularly given that any significant increase will lead to a hike in energy bills.
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