Further Government Support for High Energy Usage Businesses
High energy usage businesses, such as steel and paper manufacturers, are set to receive further support for electricity costs as the government has confirmed details Friday 29 April, of the Energy Intensive Industries (EII) compensation scheme.
The scheme was meant to expire at the end of March and was rolled out to provide relief for businesses suffering elevated costs from the UK Emissions Trading Scheme (ETS) and Carbon Price Support mechanism after recognising domestic industrial electricity prices are higher than those of other countries following the UK’s departure from the European Union.
How long will the scheme run for?
The scheme will be extended for a further 3 years and its budget will be more than doubled. This will help ensure the UK remains an attractive investment destination for energy intensive industries, whilst encouraging greater electrification to help cut emissions as part of the green industrial revolution across the country.
Today’s announcement will add to the more than £2 billion the government has provided since 2013 to support businesses in energy intensive sectors with the price of electricity bills.
Industry Minister Lee Rowley said:
“We want to keep the UK at the forefront of manufacturing, helping our energy intensive industries remain competitive and sustainable for the long term, and continuing to power our economy with thousands of jobs across the country.”
“We are not only extending our support through the compensation scheme, by offering a greater level of compensation to eligible firms, we are delivering more relief from electricity costs for these industries.”
The scheme provides businesses with relief for the costs of the UK Emissions Trading Scheme (ETS) and Carbon Price Support mechanism in their electricity bills, recognising that UK industrial electricity prices are higher than those of other countries.
The global shift to greener technology
The scheme will now also provide support for companies that manufacture batteries for electric vehicles, supporting the UK’s drive to capitalise on the global shift to greener technologies.
Investment Minister Lord Grimstone said:
“For the first time we are including battery manufacturers in our electricity bill compensation scheme for energy intensive industries to help keep the UK at the forefront of this growing industry.”
“By doing so, we are ensuring the UK continues to attract investment across the country, supporting jobs and building the batteries that will power our automotive industry for decades to come.”
It will be interesting to see if the Treasury offers more support in the coming weeks for other business and domestic consumers.
If you have specific concerns about rising energy costs for your business, please call us for an informal discussion.