Britain to Remove Carbon Tax on Electricity by 2028

The UK government will eliminate the carbon tax on electricity generation from April 2028 to reduce costs for households and businesses amid rising wholesale energy prices. Introduced in 2013, the tax aimed to promote cleaner energy production and help achieve climate targets.

The UK government has announced plans to eliminate the carbon tax on electricity generation starting April 2028. This move aims to alleviate the financial strain on households and businesses, which are expected to face hikes in electricity prices due to escalating wholesale energy costs linked to geopolitical tensions.

Initially implemented in 2013, the Carbon Price Support tax targeted emissions from power plants, particularly those relying on coal, to push for cleaner energy solutions in line with climate goals. Pranav Menon, a senior research associate at Aurora Energy Research, highlighted the tax removal as a beneficial strategy to reduce retail electricity costs.

With the last coal-fired power plant in Britain having closed in 2024 and a shift towards renewable energy sources underway, the government believes the tax is no longer necessary. Dan Tomlinson of the Treasury affirmed the country's commitment to decarbonizing the electricity sector by 2030, stating that existing measures suffice to incentivize cleaner energy production.

(With inputs from agencies.)