Energy Intensive Industries (EIIs) are being urged to claim their share of a multi-million pound compensation package following approval from the EU.
As you are no doubt aware, EIIs have long argued that the environmental taxes they pay impose a financial burden not suffered by their international counterparts. As such, they pose a threat to the UK’s competitiveness in manufacturing and we’re certain that the compensation announcement comes as welcome news to your own high energy use business.
Why is the Government issuing compensation?
The Government has a duty to reduce the country’s greenhouse gas emissions by at least 80% by 2050.
To help reach this figure, businesses are being incentivised to generate electricity from renewable sources.
The Government has put in place Renewables Obligation (RO) and Feed-in-Tariff (FITs) schemes in order to incentivise renewable energy supplied through the National Grid.
It recognises, however, that in the short to medium term, the resulting increase in retail electricity prices risks reducing the competitiveness of the UK’s most electricity-intensive businesses when operating in internationally competitive markets.
As a result, the Government has committed to providing compensation to negate the impact the renewables policy will have on the costs of electricity for the most energy intensive industries, in line with EU ruling.