Further points and clarification how this will benefit the aluminium industry:

  • The Government today announced measures to support Britain’s strategic Energy Intensive Industries (EII) from high electricity prices from 2024 onwards.
  • The support will be made available to 300 businesses already qualifying under the EII scheme who are particularly exposed to the cost of electricity, such as steel, metals, chemicals and paper. This is different to the current EBDS and ETII schemes which were recently introduced as it uses different rationale for eligibility.
  • This support will be crucial to helping these businesses remain internationally competitive and incentivise large manufacturers to stay and scale-up their businesses in Britain, moving us further towards achieving our net zero ambitions.
  • The key measures of the scheme consist of:
    • Exemptions from the costs arising from renewable energy obligations such as the Feed in Tariff, Contracts for Difference and the Renewables Obligation.
    • Exemption from capacity market charges
    • Reductions of up to 90% relief from network charging costs, which are the costs industrial users pay for their supply of electricity.  subject to deliverability
  • This scheme will not be exchequer funded. Costs will instead be redistributed amongst all other energy users and will only lead to a small increase in bills for consumers – approximately 6p to 10p per week for the average household from 2024, and an approx. £1/MWh increase in electricity for non-eligible businesses.
  • Between now and Q2 2025, it is estimated that electricity wholesale prices will drop by over £200/MWh and gas prices by over £50/MWh. Therefore the (small) additional costs for households of c. £1/MWh are expected to be more than offset by much larger reductions in wholesale energy costs.
  • The delivery mechanisms and timelines for implementation of these measures will be consulted on in the Spring.
  • This support builds on the backing already offered to energy intensive industries by government. In April 2022 the Government extended the Energy Intensive Industries Compensation Scheme by a further 3 years, and more than doubled the budget. 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.

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Government action to supercharge competitiveness in key British industries and grow economy (23/2/2023)

  • The government announces the British Industry Supercharger: decisive measures to make Britain’s strategic energy intensive industries more competitive across Europe
  • 300 companies – employing 400,000 skilled workers – in vital sectors including steel, metals, chemicals and paper set to benefit
  • backing proves the UK’s determination to secure a competitive future for these industries and long-term resilience of the UK economy for global investment

300 businesses across the UK will benefit from the British Industry Supercharger: targeted measures to ensure the energy costs for key UK industries are in line with other major economies around the world – levelling the playing field for British companies across Europe.

The support will be made available to sectors particularly exposed to the cost of electricity, such as steel, metals, chemicals and paper. These industries employ around 400,000 skilled workers right across the UK, and support many more in their supply chains. In 2019 their exports made up around 28% of total UK exports.

Proposed changes under the Supercharger – set to be consulted on in the Spring – will exempt firms from the certain costs arising from renewable energy obligations such as the Feed in Tariff, Contracts for Difference and the Renewables Obligation, as well as GB Capacity Market costs, whilst exploring reductions on network charges, which are the costs industrial users pay for their supply of electricity.

The measures announced by the Business and Trade Secretary Kemi Badenoch today (Thursday 23 February) will bring the energy costs of the UK’s energy intensive industries in line with those charged across the world’s major economies. This is crucial to helping these businesses remain internationally competitive, and will enhance the UK’s attractiveness as a destination for international investment as well as remove barriers to move us further towards greener technology as part of a sustainable net zero future.

Read more: Government action to supercharge competitiveness in key British industries and grow economy

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