Ammonia: Trade Competitiveness

(asked on 30th June 2021) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the combined potential effect of (a) UK Emission Trading Scheme costs and (b) industrial energy oncosts on the competitiveness of UK ammonia production.


Answered by
Anne-Marie Trevelyan Portrait
Anne-Marie Trevelyan
Minister of State (Foreign, Commonwealth and Development Office)
This question was answered on 9th July 2021

To mitigate adverse affects on competitiveness and the risk of carbon leakage from UK Emissions Trading Scheme (UK ETS) costs, ammonia producers receive a significant number of allowances for free. As part of the Free Allocation Review, we will be looking at possible future changes to the allocation of free allowances within the UK ETS. We published a call for evidence on 17 March 2021 which closed on 23 April 2021, and we will publish a response in due course.

The Government recognises that the UK’s industrial electricity costs are currently higher than those in many other countries. This partly reflects how the costs of the electricity system are distributed across household and industrial customers. Nevertheless, we are committed to minimising energy costs for businesses to ensure our economy remains strong and competitive and we have therefore put various schemes in place to reduce the policy cost in electricity prices for those energy intensive industries most at risk of facing a significant competitive disadvantage, including production of ammonia.

Furthermore, the Government has schemes worth nearly £2 billion in operation, or in development, supporting energy intensive industries to decarbonise. These schemes include the Industrial Energy Transformation Fund to help companies reduce their energy costs and transition to low carbon technologies, the Industrial Decarbonisation Challenge Fund to support industry with the deployment of low-carbon technologies in industrial clusters, and to improve the resource and energy efficiency of foundation industries.

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