The Speaker
Tuesday, 18 June 2024 – 17:30

British Steel requests £100m emergency government loan amid Brexit delay

Another victim of Brexit uncertainty, British steel, has requested a £100m government loan after being frozen out of the EU scheme.

Before Brexit the company could have used EU carbon credits to mitigate the pollution bill in 2018, however, free carbon permits have been suspended by the EU until a Brexit deal is confirmed.

This creates a struggle for British steel as the carbon emissions trading system (ETS) gave permission for industrial polluters to pay for carbon emissions last year.

British Steel is now in talks with Theresa May and the Department of Business proposing the loan is secured only in a matter of weeks to obtain financial security, according to Sky News.

The free permit allows firms to release 1,000kg of carbon dioxide which can then be traded for money.

And consequently, due to being frozen out, British Steel is unable to pay the EU’s carbon emissions trading system (ETS) which includes £2billion of emissions allowances.

The six-month extension of Brexit requested by Theresa May has therefore resulted in the UK to be excluded from the ETS.

Conservative representative, Andrew Percy, representative commented negatively against the delay, saying a deal would give British Steel the certainty it needed.

“This was one of the reasons I supported the deal. Sadly, local Labour MPs opposed that, and pretty much every other way of leaving the EU, which has directly led to British Steel asking for this funding.”

Nic Dakin, Labour MP for Scunthorpe also highlighted the delay dangers: “It reflects the dangers for our area of leaving the EU without a good deal. And underlines why it is so important to avoid a no deal exit from the EU”.

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