The UK’s plans to compensate certain energy-intensive users from higher electricity costs as a result of the carbon price floor has been approved by the EU.
The carbon price floor, which was raised to £9.55 per tonne of carbon dioxide in April in Britain, is a tax on coal, gas and oil and is aimed at reducing the use of electricity produced by fossil fuels.
The plans for compensation, which partially offsets the higher electricity costs, “is in line with EU state aid rules”, the European Commission said.
It added in a statement: “The Commission’s investigation has found that the measure is fully in line with the principles set out in the new Environmental and Energy Aid Guidelines.
“The Commission concluded that the measure would further EU energy objectives without unduly distorting competition in the Single Market.”