New plans to assist subsidise their electricity bills could provide additional relief for businesses that use a lot of electricity, such steel and paper mills.
The possibility of raising the level of exemption for some environmental and policy charges from 85% of costs to 100% is being discussed by the UK government.
This reflects higher industrial electricity prices in the UK than in other nations, including in Europe.
These higher prices could impede investment, competition, and commercial viability for hundreds of businesses in sectors like steel, paper, glass, ceramics, and cement, increasing the likelihood that those businesses will leave the UK.
The plan would sustain some 300 companies and 60,000 jobs in the industrial heartland of the UK. In order to protect thousands of jobs across the nation and ensure economic growth, it would be beneficial to examine ways to lower the cost of doing business for key industries.
This would also help secure the future of domestic manufacturing and maintain a competitive business environment in the UK.
Businesses can get respite from paying Feed in Tariffs, the Renewable Obligation, and Contracts for Difference in their energy bills thanks to the Energy Intensive Industries Exemption Scheme.
Kwasi Kwarteng, the business secretary, said:
British manufacturers are the lifeblood of our economy and central to our plans to overcome this period of economic uncertainty.
With global energy prices at record highs, it is essential we explore what more we can do to deliver a competitive future for those strategic industries so we can cut production costs and protect jobs across the UK.
Director General of UK Steel Gareth Stace said:
The publication of this consultation is a significant step forward in delivering competitive electricity prices for the UK steel sector and should provide some much-needed relief in the face of extremely challenging circumstances at the current time.
While there remain difficulties, this announcement demonstrates that UK government understands the challenges of British industry and continues to support steelmakers and steel communities across the country.
A targeted support programme for energy-intensive companies is the subject of this consultation, which was made public by the British Energy Security Strategy.
The next administration will have the choice to implement this programme given the current high cost of electricity by starting this consultation now.
Since 2013, the government has given more than £2 billion to businesses in energy-intensive industries to help offset the cost of electricity bills.
The commencement of the consultation comes after the separate but comparable Energy Intensive Industries Compensation Scheme was extended for an additional three years and had its budget more than doubled.
Businesses are given relief from the expenses of the UK Emissions Trading Scheme (ETS) and Carbon Price Support mechanism in their electricity bills thanks to the compensation scheme.