UK industries to be shielded from Energy Bill cost rises

Posted at December 2, 2012 » By : » Categories : News » Comments Off on UK industries to be shielded from Energy Bill cost rises

As UK Energy Secretary Ed Davey today officially unveils the government’s long-awaited Energy Bill, he confirmed that energy intensive industries will be exempted from increased costs.

The Energy Bill’s central new regime, contracts for difference (CfD), which is designed to bring investment in new low-carbon generating capacity like nuclear power stations and wind farms, could bring additional costs for some industries.

“Decarbonisation should not mean deindustrialization,” says Davey. “Energy intensive industries are an important part of the UK economy, in terms of economic output and employment throughout the supply chain.”

He is adamant that there is no advantage- either for the UK economy or global emissions – to forcing highly emitting companies to relocate outside the UK.

The exact scope of the exemption was not laid out today, as it is still being considered by the Departments of Energy and Climate Change (DECC) and Business, Innovation and Skills (BIS), but will be put forward for more detailed consultation next year.

A separate initiative worth £250 million to compensate businesses for additional costs arising from the carbon floor price and the EU Emissions Trading System is also currently under consultation.

“By giving an exemption to industries that use high levels of energy, we are ensuring that the transition to the green economy is a genuine win-win for Britain,” says Business Secretary Vince Cable.

Wind turbines, for example, require steel for their construction, cement for their foundations and high-tech textiles for their blades.

“This exemption will ensure the UK retains the industrial capacity to support a low carbon economy,” says Davey.

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Related stories:
UK government’s long-awaited Energy Bill laid before Parliament (29-Nov)
UK government fails to deliver decarbonisation target in Energy Bill (23-Nov)
Energy-intensive industries should be exempt from carbon floor price, says CBI (5-Aug 2011)
Energy-intensive industries need a break, says CBI (15-Jun 2011)

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