Energy-intensive industries: support for indirect costs of energy and climate change policies
Published 12 December 2012
© Crown copyright 2012
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This publication is available at https://www.gov.uk/government/publications/energy-intensive-industries-support-for-indirect-costs-of-energy-and-climate-change-policies/energy-intensive-industries-support-for-indirect-costs-of-energy-and-climate-change-policies
Overview of support available
To help the UK meet its low carbon targets, the government has introduced energy and climate change policies to:
- reduce greenhouse gas emissions
- encourage the use of renewable energy
However, the cumulative effect of these policies has contributed to a cost differential between the UK and other countries.
Without targeted support, this may:
- affect the competitiveness of businesses in sectors such as steel, paper and cement
- make the UK a less attractive place to invest
- increase the risk that these businesses move out of the UK to countries with less ambitious low carbon targets
To address this, the government has taken action to reduce the cumulative costs of energy and climate change policies for energy-intensive industries.
Actions
In 2013 and 2014, the government launched compensation programmes for the indirect emission costs due to the EU Emissions Trading System and Carbon Price Support Mechanism.
At Budget 2014, the government also committed to compensate energy-intensive industries for 2 additional policies, the renewables obligation (RO) and the small-scale feed-in tariff (FiT).
The Autumn Statement 2015 announced that the government will move from compensation to an exemption scheme which will reduce the charges from RO / FiT. The aim is to introduce this by April 2017. Compensation will continue to be provided until this new scheme is in place.
Government will also exempt elegible business from the costs of the Contracts for Difference scheme. Our aim is to bring this into force later in 2016.
In the longer term, government is also taking action to support energy-intensive industries to improve energy efficiency and reduce carbon emissions through the 2050 Roadmaps programme.
EU Emissions Trading System (EU ETS) and Carbon Price Support
How to apply for the EU Emissions Trading System (EU ETS) and Carbon Price Support (CPS) compensation scheme
View the consultation for EU ETS and CPS
Renewables obligation (RO) and small-scale feed-in tariff (FiT)
View the consultation for RO /FiT
Contact
If you have a question about the package contact us: energyintensiveindustries@bis.gsi.gov.uk.