The European Commission (EC) has decided to approve the so-called ‘dual-use exemption’ under the UK’s Climate Change Levy.
The Commission had already approved several measures under the Climate Change Levy in March 2001, including exemptions for the use of electricity generated from renewable resources.
However, it had opened a formal investigation in relation to the dual-use exemption, because of doubts about its effects on competition and environmental consequences.
The dual-use exemption itself covers energy products that are used primarily for a non-fuel purpose. One example of dual use occurs in the production of steel in a blast furnace, where coke is used primarily as a reducing agent (a non-fuel use), but also provides heat as a by-product (a fuel-use).