Flogas: freeze on climate change levy for LPG is good news

The managing director of Flogas Britain has welcomed the commitment to freeze the CCL (Climate Change Levy) main rate for LPG (liquefied petroleum gas) at the 2019-20 level until at least April 2022.

Commenting on last week’s budget, Lee Gannon said the decision was ‘a significant show of support’ to the industry – one that positively reinforces the fuel’s role in cleaning up the UK’s off-grid energy mix.

He said: “As an industry leader, we at Flogas are delighted with the outcome of yesterday’s budget with regards to the CCL rate for LPG. The Treasury would not ordinarily set levy freezes for longer than a 12-month period, so its departure from ‘the norm’ in this instance serves as a significant show of support to the industry. This was a carefully considered and wholly logical step on the Chancellor’s part – providing industry stakeholders with vital reassurance that LPG is being taken seriously as a fuel that can help decarbonise off-grid homes and businesses on a national scale.”

And he added:  “The announcement also positively reinforces the vision set out in the government’s recently launched Clean Growth Strategy, which made public intentions to reduce dependence on high-carbon fossil fuels – particularly oil, and particularly in parts of the country with no mains gas access. Put simply, LPG is the lowest carbon conventional off-grid fuel available today. Add to that the fact that it is cost-effective and readily available through Flogas’ robust, long-established national delivery network, and it’s easy to see just how big an impact it will continue to have in reducing emissions from off-grid heating.

“Scores of homes and businesses have already made the switch from oil to LPG, and we expect to see many more follow suit in the next few years. The CCL freeze will only serve to support our efforts further, so we would like to thank the Chancellor for his foresight on this matter. We also look forward to continuing to work closely with ministers to develop a clear policy framework for the Clean Growth Strategy as it rolls out.”

Earlier this month, DCC, the parent company of Flogas Britain, said that it would look to acquire mores assets – after it announced better than expected group first half adjusted profit of £122.5m. The company agreed to buy NGL Energy Partners LP’s Retail West LPG division for $200m (£152m) to enter into the US market. And the company announced its first acquisition outside its core markets in April when it agreed to buy Shell’s (RDSa.L) liquefied petroleum gas (LPG) business in Hong Kong and Macau at a value of about £120m.

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