Department for Business, Innovation and Skills
- government announces details of exemption for energy intensive industries, including steel, from major energy tariff costs
- exemption worth 390 million a year, first announced at Autumn Statement
- Business Secretary met with steel workers and Tata management during meetings at Port Talbot
- government using all ministerial, official and diplomatic levers to secure long-term viable solution at the site
The government has today (1 April 2016) published a consultation on introducing an exemption for Energy Intensive Industries (EIIs), such as the steel industry, from renewable electricity costs in a move that could save the steel industry over 400 million over this parliament.
The move, first announced at Autumn Statement, will exempt all EIIs from paying 390 million a year in policy costs of the Renewables Obligation and Feed-in Tariff. It is specifically worth more than 400 million to the steel sector by the end of this Parliament, and will provide greater investment certainty for the future.
The exemption is expected to come into force in 2017, and the government is keen the steel industry feeds in to secure the exemptions it will be entitled to.
Business Secretary Sajid Javid said:
Help with energy costs has been one of the steel industrys key asks and, having extended last year the compensation we are paying out, I want to see progress on exempting them altogether.
While we cant control the global price of steel, we are doing everything we can to help our steel industry, not just on energy costs but also securing flexibility on EU emissions rules and on tariffs.
EIIs include the steel industry and ceramics industry amongst others, employ around 600,000 people and contribute 52 billion to the UK economy. Prior to the exemption coming into force, the government will continue to pay compensation to EIIs (160 million to date since 2013, of which over 60 million has been paid to the steel industry) to reduce their energy costs.