Drax Group and Infinis Energy have initiated proceedings for a judicial review of the notice period given by the Treasury when removing the exemption from the Climate Change Levy (CCL) for electricity generated from renewable sources.
In July, chancellor George Osborne announced in his summer Budget that the CCL exemption for renewably sourced electricity would go, meaning electricity suppliers are able to claim only on renewable electricity generated before 1 August.
Drax has complained that the exemption was removed without an appropriate notice period, in this case 24 days after the announcement.
The companies have asked the court to consider “a reasonable and proportionate” notice period for withdrawal of the renewable support.
The Drax power plant (pictured) is based in North Yorkshire and co-fires biomass and coal.
The CCL was implemented in 2001 as a tax on UK business use to encourage energy efficiency, reduce carbon emissions and promote energy from renewable sources.
Customers were able to claim an exemption from the CCL if they bought electricity from certain qualifying renewable energy sources.
The Anaerobic Digestion and Bioresources Association has also criticised the policy changes, saying the removal of the CCL would cost the anaerobic digestion sector £11m.