News story

New consultation launched on energy cost relief for industry

The Business Secretary outlines details of an exemption for the steel sector and other energy intensive industries for energy costs relief.


The government has today (1 April 2016) published a consultation on introducing an exemption for Energy Intensive Industries (EIIs), such as the steel industry, from renewable electricity costs – in a move that could save the steel industry over £400 million over this Parliament.

The move, first announced at Autumn Statement, will exempt all EIIs from paying £390 million a year in policy costs of the Renewables Obligation and Feed-in Tariff. It is specifically worth more than £400 million to the steel sector by the end of this Parliament, and will provide greater investment certainty for the future.

The exemption is expected to come into force in 2017, and the government is keen the steel industry feeds in to secure the exemptions it will be entitled to.

Business Secretary Sajid Javid said:

Help with energy costs has been one of the steel industry’s key asks and, having extended last year the compensation we are paying out, I want to see progress on exempting them altogether.

While we can’t control the global price of steel, we are doing everything we can to help our steel industry, not just on energy costs but also securing flexibility on EU emissions rules and on tariffs.

EIIs include the steel industry and ceramics industry amongst others, employ around 600,000 people and contribute £52 billion to the UK economy. Prior to the exemption coming into force, the government will continue to pay compensation to EIIs (£160 million to date since 2013, of which over £60 million has been paid to the steel industry) to reduce their energy costs.

Published 1 April 2016