LONDON (Alliance News) - Drax Group PLC and Infinis Energy PLC Wednesday said they have asked for a judicial review of the notice period given by the UK government over its plans to scrap the Climate Change Levy.
Both companies released separate, but identical statements.
The Climate Change Levy is a government subsidy paid to companies that generate electricity from renewable sources that was introduced back in 2001, but has recently been scrapped by UK Chancellor of the Exchequer George Osborne, who called the levy "out-dated".
The aim of the levy was to improve energy efficiency and increase demand for renewable energy, however the government has decided to scrap numerous subsidies as the cost to the government's wallet is substantially higher than what was budgeted for.
On Wednesday, wind-farm operator Infinis and biofuel giant Drax said: "Drax Group PLC and Infinis Energy PLC have today initiated proceedings for a judicial review of the notice period given by HM Treasury when removing the exemption from the Climate Change Levy for electricity generated from renewable sources."
"The basis of this review is that the exemption was removed without the application of an appropriate notice period, as the notice given was only 24 days," the pair added.
"The companies ask the court to consider a reasonable and proportionate notice period for withdrawal of such renewable support," said the companies.
Both companies have been vocal in the past about the proposed changes to Levy. Drax has previously stated it will lose GBP30.0 million of earnings in 2015 and GBP60.0 million in 2016 because of the government changes whilst Infinis has said it would also be hit by the changes.
Drax shares were up 0.4% to 280.70 pence per share on Wednesday afternoon whilst Infinis shares were down 2.6% to 119.75 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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