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Posted 1 month ago | 2 minute read

Government considers energy intensive industry exemption from green levy costs

The UK government is considering exempting energy-intensive industry from having to contribute toward the costs of the nation’s renewables subsidy schemes.

Businesses such as steelmakers, paper mills, glass, ceramics, and cement companies are already exempt from up to 85% of the costs passed onto all commercial entities to fund national programmes such as the Feed in Tariff, Renewables Obligation and contracts-for-difference schemes, which incentivise clean power generation. But following continued high and volatile energy prices the government is now seeking views on whether to increase the level of exemption for certain environmental and policy costs from 85% of costs up to 100%. The proposal would help around 300 businesses, supporting 60,000 jobs.

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.

Views are invited before 16 September.

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.”

GridBeyond Managing Director UK and Ireland Mark Davis said:

“The publication of this consultation is a significant step forward in delivering competitive electricity prices for the UK’s heavy industries and should provide some much-needed relief in the face of extremely challenging circumstances.

“However, there are actions that industries can take now to mitigate against rising costs of energy. Businesses that are able to take part in National Grid schemes to reduce demand during peak events could reap the rewards, while reducing operating costs.

“GridBeyond is already working with our clients to create opportunities from energy markets. Using the assets your business already has on site GridBeyond supports your business create a holistic energy and risk management strategy that finds your energy flexibility and places in the right markets at the right time to achieve savings, revenues and sustainability.”

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