British Steel in need of government loan after being removed from EU scheme due to Brexit delay
Brexit meets reality, again
British Steel is urgently seeking an emergency £100 million loan from the government after the company was removed from an EU carbon trading scheme because a Brexit deal has not been agreed.
The second-biggest producer of steel in the UK is in talks with the state to secure funding in the next few weeks.
Accountants KPMG are advising ministers on the discussions and business secretary Greg Clark is briefed on proceedings, Sky News reports.
British Steel, which employs 5,ooo people, is understood to be unable to pay for carbon credits, having already used last year's permits to pay for working capital requirements.
The EU has opted not to provide UK businesses their usual permits under its carbon emissions trading system, a market of about £2 billion or 100 million tonnes of carbon credits. British steel represents only about 5 per cent of the allocation.
It's believed the potential extension of the UK's departure from the EU until the end of October has serious consequences for British business in this area - unless parliament passes a deal, the UK will still be frozen out of the EU scheme.
British steel have requested a short-term commercial loan but it seems likely to be rejected, given concerns regarding state aid.
Either party is yet to comment.