UK looking at more relief to energy-hungry industries

Big energy users could soon claim an exemption of up to 100% of their environmental and policy costs

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UK energy-intensive industries could see their energy bills lower than the expected level in the coming weeks after the government consultation launched today.

The Department for Business, Energy and Industrial Strategy is consulting on the option to increase the level of exemption for certain environmental and policy costs from 85% of costs up to 100%.

The Energy Intensive Industries Exemption Scheme provides businesses with relief for the costs of renewable levies, including Contracts for Difference, Renewable Obligation and Feed-in-Tariffs in their energy bills.

Earlier this year, the British Ceramic Confederation (BCC) said many manufacturers cannot absorb the rising costs.

In recent months, the skyrocketing energy prices mean that UK industrial electricity prices are higher than those of other countries.

Analysis suggests UK steel producers have to pay nearly 61% more for electricity than their counterparts in Germany and almost 51% more than in France.

This trend could hamper investment, competition and the ability of businesses, including steel, paper, glass, ceramics and cement to stay afloat.

Business Secretary Kwasi Kwarteng said: “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.”