Energy-intensive businesses, such as steel and paper makers, are set to receive additional support for electricity costs as the government today (Friday 29 April) confirmed details of industries to high energy intensity (IED) Compensation plan.
The program will be extended for 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, while encouraging greater electrification to help reduce emissions as part of the Green Industrial Revolution across the country.
Today’s announcement will be on top of the more than £2billion 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, help our energy-intensive industries remain competitive and sustainable over the long term, and continue to fuel our economy with thousands of jobs across the country.
We are not only extending our support through the Compensation Scheme, by providing a higher level of compensation to eligible businesses, we are providing more electricity cost relief to these industries.
The program offers companies relief from the costs of the UK emissions trading scheme (EST) and the carbon price support mechanism in their electricity bills, recognizing that industrial electricity prices in the UK are higher than those in other countries.
Now the program will also provide support to companies that manufacture batteries for electric vehicles, supporting the UK’s drive to benefit from the global shift to greener technologies.
Investment Minister Lord Grimstone said:
For the first time, we are including battery manufacturers in our electricity bill offset program for energy-intensive industries to keep the UK at the forefront of this growing industry.
In 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.
Industry Minister Lee Rowley has met with business groups representing energy-intensive industries to discuss the extension of the scheme, including UK Steel and the Confederation of Paper Industries.
The government will also consider other measures to support businesses, including increasing the exemption from the revolving bond to 100%. Further details will be announced in the coming weeks. This is on top of existing support through the £315million Industrial Energy Transformation Fund to help heavy industry reduce bills and emissions.
UK Steel Managing Director Gareth Stace said:
The 3-year extension of the IED The compensation scheme and the increased level of relief it provides responds to a long-standing demand from industry and provides the UK steel sector with a much-needed reduction in electricity costs. This increase in pay is a key priority for the steel sector and a much-needed step in tackling industrial electricity prices that are preventing the UK steel sector from competing with our European counterparts.
Director General of the Confederation of Paper Industries (CPI) Andrew Large said:
the CPI welcomes the extension of the existing carbon price floor (CPF) compensation scheme that takes into account the cost of carbon on industrial electricity prices. We look forward to working with the government to develop further measures to help close the competitiveness gap with our European and global competitors, many of whom are already receiving an increased level of support to cushion the impact of an extended period of prices. high energy.
Executive Chairman, Britishvolt (VB) Peter Rolton said:
This is a positive step on the part of the UK Government, clearly recognizing the strategic importance of battery manufacturers and other industries with intensive energy needs, on the roadmap to net zero, and the urgent need for them to become and remain internationally competitive given the high levels of energy bills. Support through this and others IED programs will help people like VB to build a factory and adjacent supplier park, powered by both renewable and affordable energy. This in turn will bring thousands of new jobs, increased productivity and innovative net zero solutions to the automotive sector, the North East and the wider economy.