You couldn’t make it up … Sorry, they just did
‘The government has given British Steel an emergency £120m loan to cover an EU bill for carbon dioxide emissions, after the delay in reaching a Brexit withdrawal deal forced it to intervene.
The business secretary, Greg Clark, told parliament on Wednesday that British Steel would have faced a bill of more than £600m from EU regulators if the government had not given it the support.
British Steel has been unable to obtain its free carbon emissions credits for this year under the EU’s Emissions Trading System, after the European Commission suspended the UK from the scheme in December in preparation for a possible no-deal Brexit.
While the UK’s membership of the EU has been extended until October, parliament’s inability to vote through a withdrawal agreement has meant that British companies, including British Steel, are still locked out of the system.
British Steel faced a fine of £500m from the European commission, on top of the £120m cost of buying the allowances, which polluting industries must have if they continue to emit greenhouse gases.
The company, which has an annual turnover of £1.4bn, approached the government earlier this year, saying it was unable to pay for enough allowances before the deadline of midnight on Tuesday. Clark said a liability of that size would have put the company under “significant financial strain”.
The government expects to recoup all of the money loaned to British Steel plus interest by taking over British Steel’s allowances and selling them on. British Steel has committed to cover the difference if the price of allowances falls by the time it eventually receives them.’