Announcement

£250 million energy intensive industries package consultation now open

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

Lasting for 11 weeks, the consultation will be used to gather views on proposals for the multi-million pound package, which aims to reduce the…

Lasting for 11 weeks, the consultation will be used to gather views on proposals for the multi-million pound package, which aims to reduce the impact of energy and climate change policies on the cost of electricity for energy intensive industries. Industry and other interested parties are encouraged to comment on the proposals.

Business Secretary Vince Cable said:

“Rising electricity prices are a real concern for many businesses that see the issue as a barrier to growth. This is why we set aside up to £250 million in the Autumn Statement to offset some of the costs of energy and climate change policies for the most energy intensive industries.

“Many energy intensive businesses are located in areas that have been hit hard by the economic downturn, which is why it’s important that we get this right and present the best support package available.

“Following detailed consideration of the responses to this consultation, I will announce the proposed scheme for compensation in spring 2013, subject to state aid considerations from the European Commission.”

Government estimates predict that energy and climate change policies could add up to 28 per cent on average electricity prices paid by large energy intensive users in 2020.

Energy and Climate Change Secretary Edward Davey said:

“It is important we ensure that as we move to a low-carbon economy, those industries that are more energy-intensive are not forced to relocate to other countries. This would not only have a negative impact on our economy, but could also result in us exporting emissions to countries that are not as strongly committed to cutting carbon emissions.

“Compensating the most electro-intensive industries will benefit our economy by retaining vital jobs and preserving our manufacturing base, whilst enabling our industries to grow and transition to a green economy.”

Notes to editors:

  1. In his Autumn Statement on 29 November 2011 the Chancellor announced that the Government intends to implement measures to reduce the impact of energy and climate change policy on the costs of electricity for the most electricity-intensive industries, beginning in 2013. This will be worth around £250 million over the Spending Review period.

  2. As part of the Autumn Statement the Government has committed to:

  1. To support the Government’s commitments, in March 2012 BIS and the Department for Energy and Climate Change (DECC) launched Compensation for the indirect costs of the Carbon Price Floor and EU Emissions Trading Scheme (ETS) - call for evidence. This asked companies and trade bodies to engage actively and share information and data on their electricity-intensity, in order to help Government target compensation effectively. It closed on 4 May.

  2. Anyone wanting to find out more about the proposals and submit their views should visit http://www.bis.gov.uk/policies/business-sectors/energy-intensive-industries

  3. The consultation page can be found at http://www.bis.gov.uk/Consultations/energy-intensive-industries-compensation-scheme?cat=open

  4. The Government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:

  • To create the most competitive tax system in the G20
  • To make the UK the best place in Europe to start, finance and grow a business
  • To encourage investment and exports as a route to a more balanced economy
  • To create a more educated workforce that is the most flexible in Europe

Work is underway across Government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the Government wants the economy to travel.

  1. BIS’s online newsroom contains the latest press notices and speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.

Notes to Editors

Contact Information

Name BIS Press Office Job Title

Division Department for Business, Innovation & Skills Phone

Fax

Mobile

Email bispress.releases@bis.gsi.gov.uk

Name Andy Aston Job Title

Division Department for Business, Innovation & Skills Phone 0207 215 6963 Fax

Mobile

Email andy.aston@bis.gsi.gov.uk