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Government 'addicted to carbon' as green groups blast Budget


Plans to hit renewable energy developers with a controversial windfall tax that penalises zero-carbon projects, yet supports oil and gas schemes, are facing a barrage of fire from environmental campaigners.

Jeremy Hunt released papers alongside Wednesday’s Budget which confirmed the Government will press ahead with plans for an Electricity Generator Levy (EGL).

Friends of the Earth and Greenpeace UK are both accusing the Government of failing to prioritise renewables.

Green electricity developers are warning the 45% levy, which targets losses, will effectively prevent new on-shore wind and solar projects from being built – putting the UK’s Net Zero ambitions at risk.

They cite independent economic research from Oxera that found that the EGL, which is designed to target ‘exceptional profits’, fails to account for high build inflation for new renewable projects. Over the past 12 months the ‘breakeven’ rate for a new development has risen by 23% because of increased finance, labour and material costs.

Rod Wood, Managing Director of Community Windpower, said: “Despite the Chancellor’s claims, make no mistake – the Government is addicted to carbon. This Budget has manifestly failed the renewables sector and put the UK’s Net Zero ambitions at considerable risk.

“By making new investment unviable, the EGL will damage the climate legacy we leave for our children and harm the economy, green jobs and energy security priorities.

“It beggars belief that when he should be doing all he can to minimise harm to homegrown renewables, Jeremy Hunt has instead been promoting his £20bn subsidy for oil and gas producers.”

Green groups are equally scathing of the Chancellor’s Budget, arguing that it didn’t do enough for the environment.

Mike Childs, head of policy, science and research at Friends of the Earth, said: “Achieving cheaper energy and avoiding climate breakdown requires a rapid investment in onshore and offshore renewables. The government’s unfair windfall tax on renewable energy companies will drive investors overseas, harm the economy and result in the UK missing its own legally binding targets to cut carbon emissions. The government must go back to the drawing board and work with the renewables industry to agree a tax regime that both incentivises investment and enables green energy companies to contribute their fair share in taxes.” 

Dr Doug Parr, Policy Director at Greenpeace UK said: “It is absurd that the Government continues to favour tax breaks for fossil-fuel energy production while delivering a hammer blow to our renewables industry. There is a battle for clean technology investment between the USA and EU, and UK needs to up its game and encourage investment into our vital green energy sector, both to reach net zero and, at the same time create thousands of high-paying jobs. The Government has no excuse for allowing this discrepancy to stand”.

Dated: Thursday 16th March 2023.

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