Brussels, 02/04/2001 (Agence Europe) - The European Commission has approved the British scheme for exemption from paying the tax relating to climate change, a tax that took effect on 1 April 2001 in the aim of reducing greenhouse gas emissions in Britain by 12.5%, in the context of the Kyoto Protocol. This tax should make it possible to reduce carbon production by around 5 million tonnes by the year 2010 and bring in one billion pounds sterling during its first complete year of application.
British authorities had notified the Commission of their wish to apply several tax reductions or exemptions, subdivided into four categories, during a ten-year period, in order to allow companies to provide for the investment required in energy saving programmes and to guarantee the legal safety of investment planned. The four categories of tax breaks or lower rates are as follows: a) exemptions for electricity, gas and coal used in public transport and goods transport by rail (other than diesel and petrol which are already the subject of excise duties); b) tax exemptions for the use of fuels and electricity from combined "quality" heat and electricity production (technology allowing a considerable reduction in the volume of fuel used and the emissions produced compared to traditional, and separate, methods of thermal and electricity production); c) exemption for electricity produced from certain clean energy sources (wind power, tidal power, geothermal power, etc.); d) reductions for companies that conclude agreements on climate change (up to 80% of tax).
The system foreseen will contribute towards enhancing the sue of techniques and energy sources that respect the environment and incite companies with high energy consumption to considerably improve their behaviour ecological level speaking. The Commission decision to authorise these exoneration, either because they are not considered as State aid or because they are compatible with European rules, allows the British authorities to implement the main elements of the tax on climate change. However, on a point, the Commission decided to open a formal investigation procedure, namely to dual use fuels, in order to assess whether these are not State aid. It will take a final decision after having received comments from third parties.