Risk & Economy » Tax » Power duo take UK to court over green tax exemption

Power duo take UK to court over green tax exemption

Drax and Infinis believe 24-day notice period to remove climate change tax exemption was too short

POWER PRODUCERS Drax and Infinis Energy have commenced legal proceedings against the government for failing to provide enough notice of its removal of a climate change tax exemption.

The move, announced in July by George Osborne during the Summer Budget, saw the exemption of renewable energy suppliers from the Climate Change Levy removed. The levy was originally brought in from 2001 in order to encourage producers to increase renewable energy generation and support businesses in shrinking their carbon footprint.

Drax estimates the end of the exemption will cost it £30m this year and £60m next year as its originally coal-powered North Yorkshire power station increasingly shifts to biomass.

Infinis, on the other hand, primarily produces power from windfarms and landfill gas and is seeking a judicial review based on the 24-day notice period that accompanied the announcement, which it argues was too short.

A joint statement from the two companies read: “Drax Group and Infinis Energy have today initiated proceedings for a judicial review of the notice period given by HM Treasury when removing the exemption from the Climate Change Levy for electricity generated from renewable sources. The basis of this review is that the exemption was removed without the application of an appropriate notice period, as the notice given was only 24 days.

“The companies ask the court to consider a reasonable and proportionate notice period for withdrawal of such renewable support.”

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