The Hidden Net Zero Tax

By Paul Homewood

h/t Ian Magness

The Telegraph has finally woken up to the damage to the economy being wrought by the pernicious carbon tax:

To reduce CO2 emissions, carbon pricing has put an irreversible financial squeeze on UK businesses

When Britain’s last coal plant shut down in 2024, climate activists hailed it as a triumph for green energy.

“Just over a decade ago, coal made up nearly two fifths of UK electricity generation, but the rapid advance of renewables has made it obsolete,” declared Greenpeace.

But what really killed King Coal wasn’t renewables – it was taxes.

In 2015, the Government doubled the carbon tax levied on fossil fuel power stations, effectively crippling the business model of coal-fired plants. This was in an attempt to slash emissions – and by that measure it has been hugely successful.

But now these same taxes are pushing up electricity prices for households and squeezing the life out of British industry, experts and businesses say.

Sir Jim Ratcliffe, the billionaire tycoon behind petrochemicals empire Ineos, has warned that carbon pricing is “killing manufacturing” and increasing the UK’s dependence on imports from countries with less stringent standards, such as China.

“The reason we get frustrated, and the reason that we criticise carbon costs, is because the Government can do something about this at the slash of a pen, if it wishes,” says Stuart Collings, the boss of Ineos’s chemical plant in Grangemouth, Scotland.

Collings says carbon taxes are costing the Ineos plant “tens of millions of pounds” per year and severely denting its competitiveness when compared to rival factories in the US and Asia.

Full story here.

Of course, as the article reports, it is not only electricity prices that the carbon tax hits – all large industrial energy users also have to pay it.

The Telegraph also point out that “carbon taxes” in clude two elements:

1) The UK Emissions Trading Scheme, which currently prices carbon emissions at £50/tonne CO2.

2) The Carbon Price Support Scheme, which is a direct tax on emissions, set at £18/tonne CO2.

For more details, see here.

According to the Telegraph:

In July, the average cost of power generated by gas-fired plants was £79.24 per megawatt hour. Of this, £25.64 or 32pc was carbon taxes, according to figures published by the think tank Ember.

This is important as most of the time, gas power plants set prices for the rest of the electricity market – meaning the cost of carbon taxes is inflating everyone’s bills.

Ed Hezlet, head of energy at the think tank Centre for British Progress, calculates that the levies accounted for about 7.5pc or £70 per year of a typical household’s power bill.

Let those figures of £79.24 and £25.64 sink in.

We keep being told that renewables are cheaper than gas. But the strike prices for AR7 are set at around £117/MWh for offshore wind.According to Ember, who are a left wing, pro-renewable lobby group, the pre-tax cost of gas power is less than £54/MWh.