to read the full report - Ecolateral by Peter Jones

Evaluation of Opportunities for Converting Indigenous UK Wastes to Wastes and Energy
AEA/ED45551/Issue 1
• 0.105p/kg (equivalent to 0.07p/kWh) for liquefied petroleum gas (LPG).
The CCL has a number of exemptions, including fuels used by domestic users, fuels used by the
transport sector, fuels used for the generation of other forms of energy (e.g. electricity generation) or for
non-energy generation (e.g. the use of “fuels” as carbon sources for other purposes, such as a reductant
in metal smelting). In addition there are various ways that the cost of the levy can be reduced. For
example, there is an 80% discount from the CCL for sectors that agree to targets for improving their
energy efficiency or reducing carbon emissions by specified deadlines (“climate change agreements”
(CCA)). 161
There are various other exemptions but that most relevant to energy from waste is that electricity from
renewable sources is exempted from the CCL. To qualify, suppliers of renewable electricity must obtain
Renewables Levy Exemption Certificates (“Renewable LECs”). These are issued in respect of eligible
renewable output and are used to prove that the electricity supplied is from renewable sources. 1 MWh
of renewable power is equal to 1 LEC. If this supply is then made to a non-domestic customer it will not
attract CCL payments. Guidance on the HMRC web site indicates that exempt renewable sources
include municipal and industrial wastes and agricultural and forestry residues, as explained in Box 2
Box 2 Rules for Levy Exemption certificates (LECs) for waste and biomass under the CCL
LECS for waste fuelled generating stations
The regulations allow for LECs to be granted for 50% of the electricity from power stations fuelled by
waste. If the operator considers that the proportion of renewable energy content of the waste is higher
than 50% and he can provide sufficient evidence to Ofgem then more than 50% may be claimed.
LECs for Biomass power generation
To claim LECs the biomass power station operators must provide the following information to Ofgem:
o The proposed % of biomass
o Full details of the biomass content showing proportions of each category by weight
o The CV (MJ/kg) of each category of feedstock, giving details of how this was obtained.
o A description of facilities for storing biomass
o Details of the supplier(s) of biomass, including names and addresses and a copy of
extracts of contracts that detail the biomass content and contract duration.
European Emissions Trading Scheme (EU ETS)
Introduced in 2005
1 st Trading period: January 2005 – December 2007
2 nd Trading period: January 2008 – December 2012
The EU ETS 162 is an EU wide scheme intended to help meet the EU’s GHG reduction targets under the
Kyoto Protocol. The scheme creates a price for carbon through the establishment of a market for carbon
emission reductions. The EU ETS is currently in its second phase, which runs from 2008-2012. The
scheme operates through the allocation and trade of greenhouse gas emissions allowances throughout
the EU – one allowance represents one tonne of carbon dioxide equivalent. A cap on the total amount of
emissions allowed from all the installations covered is set by each Member State in their ‘national
allocation plan’ or NAP. The allowances are then distributed within Member States to the qualifying
installations. In the UK, the ETS is implemented via UK Regulations that are regulated by the
Environment Agency for England and Wales, the Scottish Environment Protection Agency in Scotland
and Department for the Environment and Heritage Services in Northern Ireland.
161
These sectors are: aluminium, cement, ceramics, chemicals, food and drink, foundaries, glass, non-ferrous metals , paper, steel, and 20 or so
smaller sectors.
162
For more information on the Eu ETS see the Defra web site: http://www.defra.gov.uk/environment/climatechange/trading/eu/index.htm and the
Environment Agency’s NatRegs site: http://www.netregs.gov.uk/netregs/62975.aspx
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