British companies pay slightly more than their European counterparts for CO2 emissions. In recent days, the difference between what British and EU companies pay for emissions has become slightly smaller, but in the past month amounted to about 8 ariz9 euros per tonne. That amounts to a capital gain of around 10 percent paid by British companies.
The more expensive emission costs are, a result of the government refusing to link the British carbon market to the larger European market after Brexit.
“This difference puts UK industry at a significant competitive disadvantage compared to European rivals at a time of sharply rising energy prices, but it does not bring any additional benefits to the environment,” the Guardian paper notes.
Lawson Steele, head of carbon and utilities research at Berenberg Bank, says that “the UK carbon market is in the shadow of the EU ETS (European emissions trading system, Ed.). Since the UK wants to trade with the EU, and the EU with the UK, it would make sense for companies to operate on the same carbon basis.”
Higher carbon prices, higher energy prices and the lack of a post-Brexit deal with the US deters investors, says Joe Morris, of UK Steel, which represents the steel industry. “This affects the competitiveness of steel companies, which is linked to investments in these companies. It affects the trust of our members and is not good for the people who work in the sector.”
The British government, according to The Guardian, would not have explained why it has so far rejected a link with the EU system. A probable reason is the desire for a” clean break ” or hard Brexit, in which as few ties as possible with EU regulations are maintained.
In contrast, the Liberal Democrats and the Green Party, who are in opposition, have called for the UK ETS to be linked to the EU system.
The leader of the Liberal Democrats, Ed Davey, said that “the UK needs an ambitious climate policy. That will always be better if we work with international partners. The fact is that the Conservatives do not succeed in this. And that’s hitting UK business at the worst possible time, as energy-intensive companies struggle with sky-high gas prices.”