Consultation outcome

Energy intensive industries compensation scheme

This consultation was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This consultation has concluded

Download the full outcome

Detail of outcome

The initial response (published 20 May 2013) only covered questions relating to indirect EU ETS compensation. We were awaiting the European Commission’s state aid approval for the Carbon Price Support (CPS) scheme. We were also considering the inclusion of more sectors who came forward with evidence about their electricity-intensity.

The second government response document addresses responses to the CPS-related elements of the consultation. It explains the government’s approach to eligibility for the scheme following the Commission’s recent approval of the scheme, and its publication of its new environment and energy state aid guidelines.

We have also updated the energy intensive industries compensation guidance.

Original consultation

This consultation ran from to


Consults on compensating main electricity-intensive business to help offset indirect costs of Carbon Price Floor and EU Emissions Trading System.


Consultation description

In his Autumn Statement on 29 November 2011 the Chancellor announced the government’s intention to reduce the impact of policy on the costs of electricity for the most electricity-intensive industries. This would begin in 2013 and be worth around £250 million over the Spending Review period.

As part of this the government committed to compensate main electricity-intensive businesses to help offset the indirect cost of the Carbon Price Floor and the EU Emissions Trading System, subject to state aid guidelines.

We published a proposal for consultation that sets out the eligibility and design of the scheme. The consultation closed on 21 December 2012. A stakeholder event during the consultation was held on 23 October 2012, to discuss the proposal in detail.

We have analysed the responses to the consultation and published this initial government response on the 20 May 2013. At the same time we published Guidelines for Applicants for the Compensation for the Indirect costs of EU Emissions Trading System in 2013 to 2014 and 2014 to 2015.

The Parliamentary Environmental Audit Committee (EAC) held an inquiry into the Energy Intensive Industries Compensation Scheme. Department for Business, Innovation & Skills (BIS) ministers attended an EAC hearing alongside BIS and Department of Energy & Climate Change officials on 4 December 2012. The EAC presented their findings in their report which was published on 4 January 2013. The government published its Response to the Committee on 20 May 2013.

Email if you have any questions about the energy intensive industry compensation.

See also further information on energy intensive industries compensation.