Source · Select Committees · Business and Trade Committee
Recommendation 30
30
Paragraph: 124
We recommend that the Government reapportions environmental levies to improve the financial attractiveness of electrified...
Recommendation
We recommend that the Government reapportions environmental levies to improve the financial attractiveness of electrified heat and to encourage the uptake of electrified low carbon heating systems incrementally over several years. The levies should reflect the relative carbon emissions of gas and electricity. We further recommend that this reapportioning must be accompanied by mitigating negative impacts on the fuel poor and vulnerable consumers, for example through targeted financial support programmes focusing on fuel poor households.
Paragraph Reference:
124
Government Response
Not Addressed
HM Government
Not Addressed
Government recognises that current pricing of electricity and gas does not incentivise consumers to make green choices, such as switching from gas boilers to electric heat pumps. We are committed to keeping costs fair and affordable for industry and consumers, and working to identify how costs can be allocated in a way which incentivises consumers to make green choices. As set out in the Heat and Buildings Strategy, we want to reduce electricity costs and are looking at options to shift or rebalance energy levies and obligations (such as the Renewables Obligation, Feed-in-Tariffs and Energy Company Obligation) away from electricity over this decade. This will include looking at options to expand carbon pricing and remove costs from electricity bills. As set out in the Energy Security Strategy we will publish our proposals on how to do so in 2022, considering overall system impacts and limiting the impact on bills, particularly for low-income consumers. Financial support is currently available to low income and vulnerable households through the Warm Home Discount, Winter Fuel Payment and Cold Weather Payment. We continue to review additional costs and how best to support fuel poor households during the transition to Net Zero. In addition to these targeted