Energy and climate change secretary Ed Davey has rejected ATH Resources' appeal against its participation in the Carbon Reduction Commitment Energy Efficiency (CRC) scheme
The failure of the appeal could cost the company £4.2 million over the next three years.
ATH Resources, one of the UK’s largest coal producers, argued that the electricity consumed by the 12km overhead conveyor at its Glenmuckloch mining site should be exempt from the CRC.
However, Davey, following a recommendation by David Hart QC, dismissed the firm’s reasoning. He explained that the equipment, which annually transports 2.8 million tonnes of coal to the company’s Crowbandsgate rail facility, did not come under the transport exemption in the CRC and affirmed the enforcement notice issued by the Environment Agency on 8 February 2011 for failing to register in the first phase of the scheme.
Davey did not reach a conclusion on ATH Resources’ other argument, that the CRC Energy Efficiency Scheme (Allocation of Allowances and Payment) Regulations are unlawful because they create a tax that contravenes EU Directive 2003/96 – the European framework for the taxation of energy products and electricity.
“While it is clearly disappointing that our appeal has been dismissed, the outcome of ATH’s contention that the entire CRC scheme is contrary to EU law has yet to be determined,” said chief executive Alistair Black.
The Doncaster-based company, which operates four opencast mines in Scotland, has been advised it can now refer the matter, including its wider challenge, for judicial review. ATH Resources says it will be discussing its position with legal advisers and will not make any payments until further clarity on the legality of the CRC is received.
“If the scheme is found to be in contravention of EU law it will have a major implication for the initiative’s operation in its current form,” said Black.
Under the CRC, organisations that fail to register risk being fined £5,000, plus a further £500 for each working day that passes before registration is complete.
