Infinis, Drax start legal proceedings against CCL change
Drax biomass dome. Author: Department of Energy and Climate Change. License: Creative Commons, Attribution-NoDerivs 2.0 Generic
UK firms Infinis Energy Plc (LON:INFI) and Drax Group (LON:DRX) have started proceedings for a judicial review of the notice period for the removal of the Climate Change Levy (CCL) exemption for renewables.
The two power producers announced the legal challenge on Wednesday, saying that the exemption was removed without the application of an appropriate notice period. More specifically, the notice given was just 24 days, they noted.
The parties request that the court now considers “a reasonable and proportionate” notice period.
The CCL exemption for renewable electricity was removed from August 1, 2015. After the move was announced in July, Infinis said it would lead to a reduction of the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) by GBP 7.5 million (USD 11.5m/EUR 10.2m) in the current financial year and by GBP 10 million to GBP 11 million in the following year.
Drax, in turn, estimates that the removal of the CCL exemption would lower its own EBITDA by GBP 30 million in 2015 and by GBP 60 million in 2016.