GB Railfreight has blasted Office of Rail and Road plans to increase network access charges for trains carrying biomass, describing them as nonsensical and short-sighted.
Speaking exclusively to RAIL at Multimodal 2018, GBRf Commercial Director Lee Armstrong explained that biomass-burning power stations are currently receiving a Government subsidy to operate for the next decade.
“So, on one hand the power stations are getting subsidies from the Government, and then on the other hand they’re getting taxation. It’s nonsensical,” he said.
Armstrong claimed the planned surcharges could result in rail freight operators moving away from transporting biomass - akin to the plummet in the amount of coal moved by rail, following the Government’s decision to double the taxes power producers pay per tonne of CO2 emitted from April 1 2015.
He continued: “If the ORR thinks we’re a captive audience and they can tax us more because of our ability to pay more, it’s nonsensical. The short-sightedness of that is that they did exactly the same thing to coal, as they didn’t realise the taxation of coal was going to make it uneconomical.
“Yes, it is a captive fleet and it can’t go anywhere else, but what’s the benefit? The cost has to go somewhere, and the fact is that the power stations are getting a Government subsidy to burn biomass at the moment. It is ridiculous - you may as well take the subsidy off them now.”
Asked by RAIL for an update on the consultation, ORR Chief Executive Officer Joanna Whittington, declined to comment. Her private secretary later issued a statement saying: “The ORR is in the process of considering the responses and considering the options. Our final proposals will be published in the draft determination, which we are expecting to come out in the early summer.”
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