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<p>The Government is committed to providing relief from the indirect costs of renewables
to the most electricity intensive industries that operate in global markets. We are
bound by the European Commission’s state aid rules in this regard and cannot, therefore,
simply use climate change agreements as the basis for eligibility for these schemes.
We have issued a consultation on a proposed methodology and are currently analysing
the results. We expect to publish a Government response to the consultation early
in the New Year and final conclusions on which sectors will be eligible once we have
state aid approval which we expect to receive by summer 2015.</p><p> </p><p> </p><p>
</p><p>The saw-milling sector was not included in the proposed eligibility list because,
based on the data available, it does not pass the proposed UK sector-level test of
requiring an electricity-intensity of at least 7%. Department for Business, Innovation
and Skills officials are content to discuss this with the association further in the
New Year.</p><p> </p><p> </p><p> </p><p>It is worth noting that the Government has
already increased the discount on the Climate Change Levy on electricity to 90% for
those sectors, like sawmilling, that are in receipt of a climate change agreement
and that we are also capping the cost of the Carbon Price Floor at £18 per ton of
CO2 – 60% of the original 2020 target price – to reduce the indirect cost to industry.</p><p>
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