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Renewable Energy: Climate Change Levy

Treasury written question – answered on 10th March 2020.

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Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton

To ask the Chancellor of the Exchequer, what assessment his Department has made of the environmental merits of removing the Climate Change Levy from commercially purchased renewable energy.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The Government is committed to meeting its climate change objectives in a cost-effective way.

Renewable electricity was exempt under the Climate Change Levy (CCL) from 2001-2015. The exemption was removed because, since the exemption was introduced, more targeted policies were introduced to support renewable electricity generation. In 2015-16 alone, the cost of all support measures for low carbon generation was about £4.3billion.

Without action, the exemption for renewable electricity under the CCL would have cost UK taxpayers £3.9bn from 2015/16-2020/21. One third of this value would have gone to supporting renewable electricity generated overseas. This electricity would not have contributed to the UK's climate change or renewable energy targets and therefore would not have represented good value for money for the taxpayer.

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