The Government has dismissed an attempt by coal miner ATH Resources to remove itself from the Carbon Reduction Commitment (CRC) scheme.
The Doncaster-based miner said that if it is compelled to participate in the CRC scheme, it could cost the company £1.4m a year for the next three years.
The company has received an enforcement notice from the Environment Agency requiring it to register as a participant of the CRC scheme, a corporate carbon reduction programme to reduce carbon emissions of UK businesses.
ATH, one of the UK’s largest coal miners, said the Secretary of State for Energy and Climate Change had dismissed its appeal against the notice.
The CRC is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large public and private sector organisations, which are estimated to be responsible for around 10 per cent of the UK’s emissions.
ATH’s shares fell 3.3 per cent yesterday following the news, down 1p to 29p.
ATH said the Secretary of State had not reached any conclusion on the group’s claim that the anticipated CRC Energy Efficiency Scheme will be unlawful as it will create a tax that will contravene EU Directive 2003/96, the community framework for the taxation of energy products and elec-tricity.
The company said it has been advised that it can now refer the matter, and its wider challenge to any requirement that makes it participate in CRC, for judicial review at a moderate legal cost.
ATH said this is something the board will consider “at the appropriate time”.
The group added that it will discuss the position with its legal advisers and will not make any payments under the CRC Scheme until further clarity on the legality of the CRC Scheme is received.
ATH’s chief executive Alistair Black said: “Whilst it is clearly disappointing that our appeal has been dismissed by the Secretary of State at this stage, the outcome of ATH’s contention that the entire CRC Scheme is contrary to EU law has yet to be determined.
“If the CRC scheme is found to be in contravention of EU law it will have a major implication for the operation of the scheme in its current form.”
Earlier this week ATH warned that escalating gas oil prices and weakness in international coal prices could hit the group’s full year trading performance.
The surface miner told shareholders at its annual general meeting in Leeds on Wednesday that the two factors are continuing to exert pressure on its operating margins.
The company said that if the two price pressures persist, they will impact on the group’s trading performance for the full year.
ATH is seeing a growing “disconnect” between surging gas oil prices – used to fuel its diggers – and falling coal prices.