Energy companies and green groups in Britain have demanded the finance ministry to maintain strong carbon price to prevent a rise in coal-fired power generation and greenhouse gas emissions. The companies are SSE, Drax and Orsted. Coal power plants produce double the carbon dioxide emissions of gas-fired power plants. According to these companies, strong pricing will lower carbon emission and promote renewable generation.
Energy companies bat for strong carbon price while industrial groups oppose it
The three companies favouring strong carbon price have already invested significantly in renewable power generation in Britain. Carbon pricing will see their businesses booming as consumers who are major carbon emitters will have to bear the burden on their electricity prices. The industrial group in Britain has therefore opposed the carbon pricing.
Britain’s carbon price is currently made up of two levies. One is a domestic carbon tax of 18 pounds ($24) per tonne. The other is obligations under the European Emissions Trading System. This system forces companies to surrender one carbon permit for every tonne of CO2 they emit.
EU carbon prices have more than doubled this year to around 19 euros ($22) a tonne. The total carbon price for British companies is around 35 pounds a tonne.
In last year’s budget, when EU carbon prices were lower. According to the government the total carbon price at that time, around 24-25 pounds per tonne, was the right level. This raised concerns among companies and green groups that the domestic tax could be lowered at the next budget.
The high carbon price has helped Britain reduce emissions
The high carbon price has helped to make coal generation less economic and also encouraged companies to switch to gas generation, reducing Britain’s greenhouse gas emissions.
Earlier in October, Britain’s National Grid said coal-fired power generation was likely to rise over the winter as high gas prices made coal power plants more profitable.
A high carbon price will curb pollution and help Britain meet its target to cut emissions by 80 per cent on 1990 levels by 2050. Britain is already half-way towards meeting this target. Much of the reduction in emissions achieved is attributed to a sharp fall in coal power generation.
Featured Image Credit: PxHere