The government has today published its response to the carbon price floor consultation. The consultation set out the government’s proposal to provide greater support and certainty to the price of carbon in the power sector, to encourage investment in low-carbon electricity generation. In line with the rates set out at Budget last week, the government confirms that:
- the target carbon price for 2013-14 will be around £16 per tonne of carbon dioxide (tCO2), which is £19.16 in 2013-14 prices
- taking this rate and subtracting the forecast Emissions Trading Scheme (ETS) rate for 2013-14 (£14.21/tCO2), the support rate for 2013-14 will be £4.94/tCO2
- prospective support rates for 2014-15 and 2015-16 are £7.28/tCO2 and £9.86/tCO2 respectively. Budget 2012 will confirm the carbon price support rates for 2014-15, and set out indicative rates for the subsequent two years
- in line with the consultation, the price floor will target £30 per tonne of carbon dioxide in 2020, rising to £70 in 2030 (based on 2009 prices)
Notes for Editors
The consultation document and the response to consultation can be found here: http://www.hm-treasury.gov.uk/consult_carbon_price_support.htm
Budget 2011 announced the introduction of a carbon price floor from 1 April 2013 and set out the support prices above.
The government intends to introduce legislation for the proposals in 2011 Finance Bill (and subsequent secondary legislation) and to bring the proposals into effect from 1 April 2013.
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