You may have seen recent news reports which have referred to a Government-led compensation scheme for businesses affected by the carbon price floor.

The carbon price floor, introduced in April last year, affects businesses which are part of the Climate Change Agreement Scheme.  The carbon price floor is a tax on the use of electricity produced by fossil fuels, currently set at £16 per tonne. Its aim is to incentivise businesses to seek greener alternatives.  

The Government had planned to compensate certain energy-intensive users from higher electricity costs triggered by the carbon price floor. Last month the European Commission gave the go-ahead for this compensation scheme when it ruled that the plans would support EU energy objectives without distorting competition in the single market.

Does the Carbon Price Floor affect you?  Yes, it dictates the amount of tax you pay in return for the amount of fossil fuel energy you use.  However, the compensation scheme applies only to major energy users who are likely to be hardest hit by the cost of the carbon price floor.  For more information on energy taxes for business, please get in touch on 01244 571830.