Posted on: 16/02/2016
Power generators Drax and Infinis have lost their fight to trigger a judicial review into the UK Government’s axing of Climate Change Levy (CCL) exemptions.
The two companies began legal proceedings in September after the Treasury only gave 24 days’ notice of the removal of the exemption for renewable energy.
The High Court in London has now decided that the pair cannot proceed with the legal challenge.
Drax said: “Whilst the High Court recognised in the judgment the merits of bringing the case, it has ruled against Drax and Infinis.
“Drax will now consider the judgment in detail.”
Dorothy Thompson, Chief Executive of Drax, said: “Since their introduction in 2001, CCL exemptions such as Levy Exemption Certificates (LECs) have played a critical role supporting investment in a wide range of renewable technologies.
“In recognising our right to bring this case, the court acknowledged that the removal of LECs was sudden and unheralded.
“However, it concluded that the government had not provided any specific and clear assurances on the continuation of exemptions and accordingly ruled in its favour.
“This hearing has raised a number of important issues regarding the way in which the government encourages private sector investment in UK energy infrastructure.”
New generating capacity needed
Thompson added: “The country needs new generating capacity and investment to help make this happen.
“We look forward to working with the government to achieve this.”
Drax, which operates its eponymous power station in Yorkshire, has converted part of its plant to burn biomass instead of coal.
When Chancellor George Osborne unveiled the removal of the CCL exemptions during his “emergency Budget” last July, Drax said the move would wipe £90 million from its profits over two years.
> See Drax's statement