Last reviewed 5 May 2022

High energy usage businesses, such as steel and paper manufacturers, will receive further support for electricity costs, the Government has confirmed.

The current Energy Intensive Industries (EII) compensation scheme will be extended for a further three years and its budget will be more than doubled. The Government says this will help ensure the UK remains an attractive investment destination for energy intensive industries, while encouraging greater electrification to help cut emissions as part of the green industrial revolution across the country.

Announcing the additional support measures, Industry Minister Lee Rowley said: “We want to keep the UK at the forefront of manufacturing, helping our energy intensive industries remain competitive and sustainable for the long term, and continuing to power our economy with thousands of jobs across the country.”

The EII compensation scheme is a UK Government scheme that provides businesses with relief for the costs of the UK Emissions Trading Scheme (ETS) and Carbon Price Support mechanism in their electricity bills, recognising that UK industrial electricity prices are higher than those of other countries.

To qualify under the scheme, businesses must pass the “sector level test” that their electricity costs amount to 20% or more of Gross Value Added, and show how much of the electricity used by the business actually goes on activities that would qualify for the exemption.

Companies producing iron and steel or aluminium, or manufacturing pulp, paper and chemicals, are some of those that qualify and for the first time, businesses that make batteries for electric vehicles are also eligible for the scheme.

Investment Minister Lord Grimstone said: “For the first time we are including battery manufacturers in our electricity bill compensation scheme for energy intensive industries to help keep the UK at the forefront of this growing industry.”

The announcement this week will add to the more than £2 billion the Government has provided since 2013 to support businesses in energy intensive sectors with the price of their electricity bills.

Further details of the EII scheme is available on the government website here.