Back in credit - British Steel looks set to get Government carbon loan
By Scunthorpe Telegraph | Posted: 30 Apr 2019
Business Secretary Greg Clark is expected to approve a £100 million loan to British Steel tomorrow, Wednesday May 1, to help it meet environmental regulation commitments.
The Scunthorpe steel giant made the request earlier this month after Brexit brought an abrupt end to a European Union-wide carbon trading scheme, Sky News reported.
Under the carbon emissions trading scheme, industrial polluters can use their allocation to pay for the previous year’s emissions.
Companies should have been awarded their permits in March but British companies have been frozen out from this year’s allocation, covering more than £2 billion of allowances, of which British Steel is said to account for around five per cent.
The Scunthorpe-based steel giant is understood to have already utilised last year’s payments to fund working capital requirements and has been left unable to pay for the latest round of carbon credits.
Sky News has learnt that Mr Clark will announce tomorrow that the Government has stepped in to meet a financial shortfall. It claims carbon credits will be surrendered to regulators, with the company repaying on commercial terms.
A statement is anticipated in the House of Commons.
Work is understood to have been ongoing on the request, with North Lincolnshire Council and town MP Nic Dakin making representations to the Department of Business, Energy and Industrial Strategy.
Mr Dakin said: This is speculation at this point. Hopefully it proves to be correct and there will be an announcement that makes it clear the UK Government is sorting out a problem that has occurred that has nothing to do with how British Steel operates. It would be a big vote of confidence in the UK steel industry, in British Steel and the fantastic workforce in Scunthorpe and elsewhere."
British Steel representatives were not immediately available for comment.