Controversial emissions tax nets the Treasury £20 billion

THE amount of money raised by a controversial green tax on Britain’s most energy-intensive businesses has passed £20 billion, but bosses say they have received only ‘a fraction’ back to help them to ‘decarbonise’ to meet the Government’s net zero targets.

The latest figures on the Emissions Trading Scheme (ETS) show £2.7 billion was paid by firms last year – on top of £17.8 billion since it was introduced in 2021.

Under the scheme, run by Ed Miliband’s Department for Energy Security and Net Zero, all the money goes to the Treasury and none is ringfenced to support firms to hit green targets.

In charge: Ed Miliband, who oversees the Department for Energy Security and Net Zero

The payments have clobbered sectors such as metal production, chemicals, glass and ceramics – which have already been hit hard by soaring energy prices.

The ETS, which was recently expanded to include shipping, was set up post-Brexit to replace its European Union predecessor. But unlike the EU scheme, there is no requirement to ringfence cash. Steve Elliott, head of the Chemical Industries Association, said: ‘When you look at how much the Treasury has taken under the ETS compared with how this is done in Europe, there’s almost nothing coming back.

‘In May, they allocated £350 million to support our sector and £120million for ceramics, but it is a fraction of what’s been paid. It’s a start but it’s not enough – much more is needed.’

Another £120 million was spent on saving production at the Grangemouth oil refinery in Scotland, and restarting the Ensus bioethanol plant on Teesside, to protect domestic carbon dioxide supplies.

The UK chemical sector’s emissions have fallen 60 per cent, mainly because 26 sites have closed in five years with the loss of 8,000 jobs – weakening Britain’s ability to produce key chemicals for clean energy, defence, advanced manufacturing and life sciences.

UK Steel has called for an overhaul of green taxes on imports – the Government plans to halve the amount of tariff-free steel imports allowed in – to ensure foreign producers selling in Britain pay the same charges as domestic firms hit by the ETS.

Meanwhile, the ceramics sector says it has invested £750 million in the last decade alone to decarbonise.

A Government spokesperson said: ‘A strong UK ETS drives green investment as part of a broader industrial strategy, creating jobs and growing the UK’s economy.’