Question

To ask the Secretary of State for Business, Innovation and Skills, what estimate he has made of the cost of including (a) the UK sawmilling sector and (b) all industries eligible for relief under the Climate Change Agreement in the scope of the Electricity Intensive Industries - Relief from the Indirect Costs of Renewables scheme.

The Government is committed to providing relief from the indirect costs of renewables to the most electricity intensive industries that operate in global markets. We are bound by the European Commission’s state aid rules in this regard and cannot, therefore, simply use climate change agreements as the basis for eligibility for these schemes. We have issued a consultation on a proposed methodology and are currently analysing the results. We expect to publish a Government response to the consultation early in the New Year and final conclusions on which sectors will be eligible once we have state aid approval which we expect to receive by summer 2015.

The saw-milling sector was not included in the proposed eligibility list because, based on the data available, it does not pass the proposed UK sector-level test of requiring an electricity-intensity of at least 7%. Department for Business, Innovation and Skills officials are content to discuss this with the association further in the New Year.

It is worth noting that the Government has already increased the discount on the Climate Change Levy on electricity to 90% for those sectors, like sawmilling, that are in receipt of a climate change agreement and that we are also capping the cost of the Carbon Price Floor at £18 per ton of CO2 – 60% of the original 2020 target price – to reduce the indirect cost to industry.