British Steel obtains a government loan of £ 100 million to pay a carbon bill

British Steel has obtained a GBP 100 million loan from the government to pay its EU carbon bill, said a source close to the company.

Money means that the privately owned company will avoid a hefty fine from the EU.

The firm said earlier this month that it needed funds to pay for its 2018 pollution bill, due in late April.

Sky News said that the government's money had been used to pay the company's carbon credits – and that British Steel would reimburse it on commercial terms.

The company was struck by a decision by the European Union to suspend access of UK companies to free carbon permits until the ratification of a Brexit withdrawal agreement.

The rules of the European Emissions Trading System allow industrial polluters to use carbon credits to pay for emissions from the previous year or to exchange them to raise funds.

Each free permit gives the company the right to emit one tonne (1,000 kg) of carbon dioxide (CO2).

"Responsive and supportive"

The Department of Business, Energy and Industrial Strategy (Beis) declined to specifically comment on British Steel, but stated that it was maintaining a "regular conversation with a wide range of companies".

Beis should make an official announcement on Wednesday.

British Steel has previously said that ministers and officials of the Department of Enterprise, Energy and Industrial Strategy have "reacted and supported".

Private equity firm Greybull Capital saved the long product business of Tata Steel – which manufactures steel for the rail and construction sectors – at the height of the crisis in the United States. steel in 2016, generating more than 4,000 jobs.

She paid a nominal fee of £ 1 for the badets, but pledged to invest up to £ 400 million in trade for which she renamed British Steel.

Workers had to accept wage cuts and pensions, but the company has since recovered its profits.

The company employs 4,000 people in its Scunthorpe plant and has sites in Teesside, Cumbria and North Yorkshire.