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Government confirms EII exemption pushed back until 2018

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The Department of Business, Energy and Industrial Strategy (BEIS) has confirmed that its planned exemption for energy intensive industries (EII) from the cost of renewable support schemes has been pushed back until 1 January 2018 at the earliest.

The government had originally planned to have the exemption in place by 1 April 2017 – timed to coincide with the expiration of the previous reimbursement mechanism – but this has been delayed due to problems acquiring state aid approval.

As a result of the European Commission taking longer than expected to rubber stamp the exemption and further delays caused by Theresa May’s snap election, BEIS has today confirmed in a consultation response that it is now intended to be introduced as of 1 January 2018.

However its adoption could be delayed further still. If the government fails to publish a revised 2017/18 renewables obligation level by 31 October 2017 there will not be enough time for the exemption to come into effect.

Should this occur, the exemption will only come into place from the start of the fourth month after necessary approvals have been obtained and a revised RO has been published.

Meanwhile the government has failed to honour its intention of making EIIs exempt from all indirect costs of renewables at this time, with costs associated with the feed-in tariff scheme yet to be included in the exemption.

More to follow...

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