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Proposals to overhaul RHI could hit Scots businesses hard

Diversified businesses could be disadvantaged.

Proposed changes to the subsidy regime for renewable heat have been met with some concern from farming and countryside groups.

 

The debacle in Northern Ireland, which ultimately cost First Minister Arlene Foster her job, has put the UK Government on guard and may well be behind moves to change rules of the current Renewable Heat Incentive (RHI) scheme to stop heat being used for no good reason apart from maximising subsidy payments.

 

The scheme is under review and the suggestion has now been made that there should be no subsidy for heat used for drying bulk products including wood fuel, grain, animal bedding or waste.

 

Many of the renewable energy installations commissioned in recent years have been designed with these uses in mind, so this will lead to problems if the suggestion is taken up.

 

Scottish Land and Estates (SLE), which represents land-based businesses, has said it would have a ‘profound effect on businesses which had been encouraged to diversify’.

 

It was important, however, the scheme operated effectively and was not misused for financial gain. SLE would support the introduction of a proportionate test to ensure any RHI applications for the purposes of drying were legitimate.

 

SLE policy officer Gavin Mowat said: “The UK Government is responding to concerns about the misuse of the RHI and we appreciate the need for this to be examined.

 

“However, rural businesses in Scotland which are legitimately accessing the scheme to support the generation of heat from renewable sources should not be disadvantaged by the actions of a minority.

 

“The RHI scheme is designed specifically to offset the use of fossil fuels. The process of drying is a major consumer of fossil fuels in value adding and processing agricultural and forestry products, especially in Scotland with its relatively wet climate.

 

“We are concerned that without an appropriate level of support, investment in renewable drying will stop and businesses will opt to remain using fossil fuels, thus undermining the drive towards lowering carbon emissions.”

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