ORR criticised over biomass charges
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.”
Armstrong claimed the planned surcharges could result in rail freight operators moving away from transporting biomass.
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 shortsightedness 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.”
Armstrong is not the only senior rail freight chief to speak out about the planned increase in biomass charges.
Outgoing Rail Freight Group Chairman Lord Berkeley previously told RAIL he believed the ORR is trying to “manipulate the freight market” with its proposed hike in access charges for biomass trains.
“The ORR is muddling ‘what is the charge, which is costreflective’, with ‘what can the market stand?’,” Berkeley exclusively told RAIL in March ( RAIL 849).
“Why is it interfering in the market? If biomass is a good thing and it is environmentally friendly and the costs are good, why should the ORR say ‘it’s affordable’ or ‘it isn’t affordable’?”
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.”