The UK Government has announced a major initiative to reduce electricity costs for Energy Intensive Industries (EIIs), with measures expected to save British businesses over £400 million per year. The announcement forms part of wider efforts to enhance industrial competitiveness, safeguard jobs, and strengthen domestic manufacturing capability.
The Department for Business and Trade (DBT) confirmed that the initiative will significantly expand support under the existing EII Exemption Scheme, which helps qualifying businesses offset the indirect costs of renewable electricity policies. The new measures aim to bring UK electricity prices more in line with international competitors and support sectors critical to the UK’s economic and Net Zero ambitions.
The Government’s statement highlighted that this move is designed to support industries such as steel, paper, chemicals, and other high-energy users. However, further clarification is now being sought on the inclusion of the aluminium sector and how the measures will be applied in practice.
ALFED’s Position and Next Steps
ALFED welcomes this announcement as a positive step toward addressing one of the most significant challenges facing the aluminium sector, the persistently high cost of electricity. Energy prices continue to have a profound impact on competitiveness across the UK aluminium value chain, from primary production to recycling, re-melting, and downstream manufacturing.
To ensure clarity and practical benefit for our members, ALFED has reached out to the Department for Business and Trade and the Department for Energy Security and Net Zero (DESNZ) with a series of key questions, including:
- Eligibility: Will aluminium producers, processors, and recyclers qualify under the updated eligibility criteria for this support?
- Application: How and when will companies be able to access these reduced electricity costs? Will this be delivered automatically via suppliers or through an application process?
- Scope: Does this announcement represent a broader review of energy cost competitiveness for Energy Intensive Industries, or a targeted extension of the current EII exemption framework?
- Future Engagement: Will Government host a dedicated roundtable or briefing session to engage directly with industry and assess where the support could have the most meaningful impact?
Why It Matters for Aluminium
The aluminium sector is a cornerstone of the UK’s industrial capability, supplying critical materials to construction, transport, energy, and defence. High energy costs have long been cited as one of the biggest barriers to competitiveness and investment, particularly for midstream and downstream producers that often fall outside formal EII definitions.
ALFED continues to advocate for fair and sustainable energy pricing for the aluminium industry as part of its wider work through the UK Aluminium Alliance, supporting decarbonisation, domestic manufacturing resilience, and long-term supply chain stability.
Next Steps
ALFED will provide a further update once more details are available from DBT and DESNZ. In the meantime, members are encouraged to share how electricity costs are currently impacting their operations, particularly where relief under existing schemes has proven difficult to access, to help strengthen the industry’s evidence base and ensure aluminium remains represented in future policy design.
Members wishing to share feedback or case studies can contact Nadine Bloxsome, CEO, at nbloxsome@alfed.org.uk.
