Britain spends nearly £150 million compensating firms hit by carbon-tax electricity hikes
The UK government paid almost £150 million in a year to offset higher electricity costs caused by the Emissions Trading Scheme, with the paper industry receiving the largest share.
In the latest year of the UK Emissions Trading Scheme compensation programme, the government disbursed close to £150 million to firms whose electricity costs rose because of the carbon tax. The paper industry was the biggest beneficiary, obtaining £50.3 million, followed by iron and steel at £42 million, chemicals at £35.7 million, and non-ferrous metals at £6.3 million, with the remaining £12.5 million spread across other sectors.
Shadow Energy Secretary Andrew Bowie denounced the arrangement as "total madness," arguing it forces taxpayers to subsidise industries that cannot afford the higher bills. Ineos owner Sir Jim Ratcliffe also criticised the tax, labeling it the "most idiotic tax in the world" and warning it could push UK-made goods out of the market. A government spokesperson countered that the ETS drives green investment, creates jobs and keeps industry competitive while reducing reliance on fossil fuels. The controversy highlights the tension between climate policy and industrial cost pressures.
Why it matters
Taxpayers are funding large payouts to keep energy-intensive firms afloat under the carbon-tax regime.
In this story
