High electricity using businesses like steel and paper mills
could see further relief under new proposals to help
subsidise their electricity costs.
The UK government is consulting on the option to increase the
level of exemption for certain environmental and policy costs
from 85% of costs up to 100%.
This reflects higher UK industrial electricity prices than those
of other countries including in Europe, which could hamper
investment, competition and commercial viability for hundreds of
businesses in industries including steel, paper, glass, ceramics,
and cement, and risk them relocating from the UK.
The proposal would help around 300 businesses supporting 60,000
jobs in the UK’s industrial heartlands. Looking at ways to reduce
the cost of doing business for key industries would help secure
the future of domestic manufacturing and maintain a competitive
business environment in the UK, ensuring economic growth and
protecting thousands of jobs across the country.
The Energy Intensive Industries Exemption Scheme provides
businesses with relief for the costs of renewable levies,
including Contracts for Difference, the Renewable Obligation and
Feed in Tariffs, in their energy bills.
Business Secretary said:
British manufacturers are the lifeblood of our economy and
central to our plans to overcome this period of economic
uncertainty.
With global energy prices at record highs, it is essential we
explore what more we can do to deliver a competitive future for
those strategic industries so we can cut production costs and
protect jobs across the UK.
Director General of UK Steel Gareth Stace said:
The publication of this consultation is a significant step
forward in delivering competitive electricity prices for the UK
steel sector and should provide some much-needed relief in the
face of extremely challenging circumstances at the current time.
While there remain difficulties, this announcement demonstrates
that UK government understands the challenges of British industry
and continues to support steelmakers and steel communities across
the country.
This is a consultation on a targeted support scheme for energy
intensive industries, as announced in the British Energy Security
Strategy. Launching this consultation now provides the future
government with the option to introduce this scheme given current
high electricity prices.
The government has provided more than £2 billion to support
businesses in energy intensive sectors with the price of
electricity bills since 2013.
The launch of the consultation follows the extension of the
separate but similar Energy Intensive Industries Compensation
Scheme for a further 3 years and a more than doubling of its
budget.
The compensation scheme provides businesses with relief for the
costs of the UK Emissions Trading Scheme (ETS) and Carbon Price Support
mechanism in their electricity bills.
