The measure

The Government has announced adjustments to climate change levy allowing relief to particular sectors. Specifically, this includes a climate change agreement applying to the data centres sector by the end of 2013 and a mixed use exemption for solid fuels used in certain gasification processes. No further amendments to the main or support rates of climate change levy have been announced.

Who will be affected?

Data centre organisations.

Entities using solid fuels in certain gasification processes.

When?

The agreement is intended to apply by the end of 2013.

Our view

The introduction of a climate change agreement will incentivise businesses in the data centres sector to reduce carbon emissions with a potentially significant reduction to climate change levy costs on electricity and fuel inputs of up to 90%. Likewise businesses carrying out certain gasification procedures may benefit from reduced climate change levy on their fuel inputs.

Significantly, no further changes have been made to climate change levy. The environmental taxation of energy generation remains unchanged since the introduction in April 2013 of the carbon price floor applying to energy generation.




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