EletiofeGovernment proposes more help for energy-intensive firms

Government proposes more help for energy-intensive firms

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Portrait of female steelworker during steel pour in steelworks

Portrait of female steelworker during steel pour in steelworks

The government is considering a plan to provide more help to energy-intensive industries in the face of soaring electricity prices.

The proposal could mean lower energy bills for firms in the steel, paper, glass, ceramics, and cement sectors.

In April, the government expanded its support for firms that use large amounts of electricity.

But the business secretary said it was “essential” to explore ways of further cutting production costs.

“British manufacturers are the lifeblood of our economy and central to our plans to overcome this period of economic uncertainty,” 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.”

The government will launch a consultation on proposals that would remove altogether the obligation to pay certain environmental and policy costs.

Director-general of UK Steel Gareth Stace welcomed the consultation, saying it should provide “some much-needed relief in the face of extremely challenging circumstances”.

“This announcement demonstrates that the UK government understands the challenges of British industry and continues to support steelmakers and steel communities across the country.”

Some support for these sectors is already in place. The Energy Intensive Industries Exemption Scheme grants firms 85% relief on a range of environmental and policy levies that are added to electricity bills.

Under the new proposals those energy-intensive firms would be 100% exempt from those additional costs.

A separate scheme to support energy intensive firms was expanded in April.

The Department for Business, Energy and Industrial Strategy (Beis) said that UK industrial electricity prices were higher than those of other countries including in Europe, which could hamper investment, competition and the commercial viability for UK firms if no action were taken.

There was a risk firms would relocate outside of the UK, it said.

Extending further support to industry in this way would help around 300 businesses supporting 60,000 jobs in the UK’s “industrial heartlands”, Beis added.

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