The UK government today secured a new agreement with the European Union to co-operate more closely on emissions and create new jobs in the clean energy sector.
Trade body RenewableUK welcomed the move, saying closer alignment between the UK and EU on clean energy could drive down the cost of electricity for bill-payers.
The UK and EU will enter into negotiations to link their Emissions Trading Schemes (ETS) so that they are more closely aligned.
The government said this will improve the UK’s energy security and avoid businesses being hit by the EU’s carbon tax due to come in next year – which would have sent £800 million directly to the EU’s budget.
RenewableUK’s executive director of policy Ana Musat (pictured) welcomed today’s announcement.
She said: “This is potentially great news for billpayers in the UK and across the rest of Europe, as it could drive down the cost of electricity in the years ahead by stabilising prices and reducing trade friction – including trading in clean electricity generated in the North Sea via interconnectors between countries.
“Crucially, it could remove the need for the EU’s Carbon Border Adjustment Mechanism which is a tax on exports of electricity and goods from the UK and other countries into the EU.
“The UK and the EU share the same ambitions on decarbonisation to tackle climate change while reducing energy bills for consumers, so aligning our Emissions Trading Schemes would be a natural next step towards doing business more efficiently with each other.
“We also welcome the commitments to explore the UK’s participation in the EU’s electricity trading platforms to streamline our markets further, and to maximise co-operation on renewables to create more jobs.
“These measures are especially important at a time when global competition for investment is intense, as they would unlock further confidence in the UK’s market as one of the best destinations for private investment in new clean energy infrastructure.”
The clean energy agreement is part of a wider deal that is forecast to add nearly £9 billion to the UK economy by 2040.