Hundreds of businesses across the UK – including British Steel – are set to benefit from reductions in energy costs under a proposed new Government scheme.
The move – designed to support competitiveness and decarbonisation of energy intensive industries – has been welcomed by Cllr Rob Waltham, leader of North Lincolnshire Council.
In total, 300 businesses across the UK will benefit from the British Industry Supercharger, which will target measures to ensure energy costs for key UK industries are in line with other major economies around the world – levelling the playing field for British companies across Europe.
Cllr Waltham said: “There is a clear commitment to backing British business, particular those industries which have a strategic importance such as British Steel.
“Global inflation continues to be a challenge and a major factor in that is high energy prices brought on by the war in Ukraine – it continues to have an impact on families and businesses alike.
“These measures have been welcomed by trade bodies and I welcome them too. Clearly there is an immediate need to support the workers potentially affected by the recent announcement from British Steel but these measures should give greater certainty and sustainability to energy intensive industry.”
The Government announced the support – set to be consulted on in the spring – will be made available to sectors particularly exposed to the cost of electricity, such as steel, metals, chemicals and paper.
These industries employ around 400,000 skilled workers across the UK, and support many more in supply chains. In 2019, their exports made up around 28 per cent of total UK exports.
Proposed changes under the Supercharger will exempt firms from the certain costs arising from renewable energy obligations such as the Feed in Tariff, Contracts for Difference and the Renewables Obligation, as well as GB Capacity Market costs, whilst exploring reductions on network charges, which are the costs industrial users pay for their supply of electricity.
Business and Trade Secretary Kemi Badenoch said: “This is carefully crafted support that will mean strategically-important UK industries like steel and chemicals remain competitive on the world stage.
“We will back these businesses to keep on growing our economy and delivering high-quality jobs and investment into the UK, as well as the products we rely on for our everyday lives and work.”
Energy Security Secretary Grant Shapps said: “Putin’s weaponisation of energy has shown how secure and affordable energy is vital to all parts of our economy – especially key sectors like steel and chemicals.
“Today’s measures will help deliver the affordable, reliable energy that these industries need to become greener, and secure jobs for the future.”
Trade bodies have welcomed the announcement.
Gareth Stace, Director General of UK Steel, said: “UK industrial electricity prices have been uncompetitive for many years, and today, the Government took a great step towards levelling the playing field for the steel industry.
“We welcome this announcement and look forward to working with government to ensure full price parity with European competitors. It is essential we can compete on an equal footing, in the short term, within the fiercely competitive steel market, both in Europe and globally.”
Dave Dalton, chair of the Energy Intensive Users Group, said: “We welcome today’s announcement with the measures to reduce electricity prices for energy intensive industries.
“These measures will bring our industrial electricity prices more in line with those in other countries and help the competitiveness and decarbonisation of energy intensive industries in the UK.”