Autumn statement: Carbon Price Support will continue to be capped at current rate

The Carbon Price Support (CPS) will continue to be capped at the current rate until 2020/21, chancellor Philip Hammond has announced in the autumn budget statement.

The news will be welcomed by those who feared the mechanism might be scrapped following lobbying by energy intensive industries.

There was no word on what will happen beyond to the CPS beyond the end of the decade. However, the chancellor said the government will “continue to consider the appropriate mechanism for determining the carbon price in the 2020s” in the full autumn statement document published by the treasury.

The document also said the government is “continuing to work with stakeholders” to produce an emissions reductions plan to meet the fifth carbon budget which it committed to in June. “The government is considering the future of the Levy Control Framework which it will set out at Budget 2017,” it added.

The chancellor also announced that:

• The National Infrastructure Commission has been invited to put forward recommendations for investment on the basis that infrastructure spending will amount to between 1 and 1.2 per cent of GDP between 2020 and 2050, up from its current level of 0.8 per cent. The government will make all final spending decisions.
• The government will put forward a green paper in spring 2017 that will “closely examine markets which are not working fairly for consumers”. 
• The Shale Wealth Fund will hand out up to £1 billion to local communities over and above industry schemes and other sources of government funding. The communities themselves will determine how the money is spent.
• The National Productivity Investment Fund will spend a further £390 million by 2020/21 to support ultra-low emission vehicles (ULEV), renewable fuels and autonomous vehicles. Of that £80 million will go towards ULEV charging infrastructure and £150 million towards low emission buses and taxis. Companies investing in charging points for electric vehicles will be offered a 100 per cent first-year tax allowance.