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Government readies EU ETS compensation scheme

The Department of Energy and Climate Change (DECC) published guidance for energy-intensive industries on how to claim compensation to offset the indirect costs of the EU Emissions Trading Scheme (EU ETS) on Monday 20 May.

A £250mn compensation package is being offered to help businesses cope with the financial impact of the EU ETS. The first tranche of the scheme will see £113mn made available, with eligible businesses able to apply for a share from 3 June. DECC also confirmed further details will be published later this year on how the government plans to provide compensation to help firms cope with the impact of the carbon floor price, currently the scheme is awaiting state-aid approval from the European Commission.

The guidance was set out alongside the government’s response to its earlier consultation on the £250mn compensation scheme. Energy minister Michael Fallon said it was “essential” not to undermine the competitiveness of UK industry as policies were implemented to generate investment in UK infrastructure. “This compensation package will support firms, protect jobs and help reduce the risk of industries leaving our shores,” he argued, adding that many energy-intensive industries will play a crucial role in manufacturing low-carbon technologies.


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