Page 9 - Gi June/July 2019

industry & government news

UK LOANS BRITISH STEEL £120M TO

COVER EU ENVIRONMENTAL PAYMENTS

THE FUTURE OF BRITISH STEEL REMAINS UNCERTAIN

THE UK HAS ANNOUNCED a £120 the government had found itself in an market and it is not uncommon for
million loan to British Steel so the “unenviable” situation. companies to use their free allocation to
company can meet payments to an EU Mr Clark insisted that the deal settle the previous year’s liabilities.
environmental scheme, in an unusual represented good value for money for However, Brussels’ decision to
state intervention by the government. taxpayers: if the price of carbon credits temporarily suspend UK companies
Business Secretary Greg Clark rose, the government would receive from receiving new allowances until a
confirmed the emergency funding in any upside, he said. If the price fell, Brexit withdrawal agreement is finalised
the House of Commons, saying British then British Steel would be required to left British Steel needing to buy credits at
Steel had otherwise faced a fine of £500 underwrite any shortfall. a time when carbon prices have rallied.
million from Brussels. The intervention removes the threat Despite the issue being one that
The steel producer approached of a colossal fine for the UK’s second- affects all British polluters, the
ministers for help after the six-month largest steelmaker, which runs a large country’s largest steelmaker Tata,
delay to Brexit left it facing a shortfall plant in Scunthorpe, in the north of which runs the Port Talbot plant, has
of carbon credits required to cover England, and employs 5,000 people. not asked the government for financial
emissions under a Brussels policy aimed The money will be used to help, according to one person.
at curbing climate change, reports The purchase carbon credits that, under Mr Clark blamed MPs for their
Financial Times. the EU’s emissions trading scheme, failure to back the government’s
Without urgent intervention, the polluting industries must submit to withdrawal agreement for the situation
company would have faced a liability of cover each tonne of CO₂ or greenhouse that British Steel found itself in, urging
more than £600 million – the fine plus gas they release. them to “reflect on the real-world
the £120 million liability – putting it Under the ETS, companies are impact” of their repeated rejection of
under “significant financial strain”, Mr awarded a certain number of credits for the Brexit deal.
Clark told the Commons. free, but many end up with a greater The Unite trade union welcomed the
“The agreement reached with British allocation than required as emissions move but warned about the future of
Steel is a unique one in exceptional fall. This is a potential source of cash the steel industry and called for greater
circumstances,” he said, admitting as permits can be sold on the carbon government support.

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News.indd 4 16/05/2019 13:38