EDITOR’S COMMENT: Rishi Sunak is examining proposals for a UK-wide carbon tax. We’ve said it before and we will say it again: we do NOT want any more green taxes!
The chancellor is seeking to replace existing EU carbon-reduction schemes with the new tax when the transition period finishes at the end of the year.
Treasury officials are also looking at longer-term proposals to extend the tax to other areas including domestic gas and agriculture, which could raise more than £25 billion by 2030, supporters say. The move has alarmed some environmental groups who fear a carbon tax could become subject to political pressure, like fuel duty, which could make it less likely that Britain meets its 2050 net-zero target.
The UK is part of the EU’s emissions trading scheme (ETS), which caps the amount of greenhouse gases that can be emitted by energy-intensive industries and electricity generators. Companies can buy or sell emission allowances, which rise over time, effectively putting a price on CO2 and encouraging investment in decarbonisation.
However the UK will cease to be a member of the scheme at the end of the year and must decide whether to create its own ETS or switch to an alternative model.
Government sources said that in the longer term the Treasury wanted a carbon tax to encourage both consumers and business to decarbonise.