What support is on the horizon for energy intensive businesses?

The impact of UK industrial electricity prices on competitiveness was one of the most prominent talking points leading up to the publication of the long-awaited Industrial Strategy.  

Now the government’s plan to promote business investment and growth in the UK over the next decade marks impending electricity cost reduction opportunities for energy intensive businesses. 

However, several schemes have launched, ended and resurfaced in this part of the policy landscape in the past few years. Let’s recap what support is available for energy intensive businesses. 

British Industrial Competitiveness Scheme

From 2027, a new British Industrial Competitiveness Scheme is set to reduce electricity costs by c.£35-40/MWh up to 2030.   

The scheme will benefit manufacturing electricity intensive frontier industries such as automotive and aerospace, and foundational manufacturing industries in the supply chains, such as chemicals. 

Eligible businesses will be exempt from Renewables Obligation, Feed-in Tariffs and the Capacity Market costs. 

Eligibility will be determined following consultation, which is set to open shortly, with a review point in 2030. 

Climate Change Agreements (CCA) scheme

This voluntary scheme allows holders of climate change agreements to claim a discount on the Climate Change Levy (CCL) – an environmental tax placed on businesses to encourage the reduction of greenhouse gas emissions and improve energy efficiency.   

In turn, participants must meet energy efficiency improvement targets which have been agreed between government and sector associations.

Although the application window for new entrants from existing sectors has been delayed, the long-awaited new CCA scheme is set to start in January 2026. 

British Industry Supercharger

Introduced in 2023 to make Britain’s Energy Intensive Industries (EIIs) more competitive across Europe and tackle the challenge of indirect carbon leakage, the British Industry Supercharger programme consists of three measures: 

• an increase in the subsidy under the existing EII Renewable Levy Exemption scheme from 85% to 100% aid intensity. 
• a full exemption from the indirect costs associated with the GB Capacity Market. 
• Compensation for EIIs on their network charging costs through the Network Charging Compensation (NCC) scheme. 

Network Charging Compensation scheme

Part of the British Industry Supercharger, Network Charging Compensation (NCC) scheme offers support to energy intensive industries by providing 60% compensation on eligible network charges.  

This reimbursement will be funded by a levy on all licensed GB electricity suppliers, known as the EII Support Levy.  

The Industrial Strategy confirmed that the support available through NCC scheme will rise from 60% to 90%. 

Energy-Intensive Industries Compensation Scheme

This scheme aims to mitigate the impact of carbon pricing mechanisms (including UK Emissions Trading Scheme and Carbon Price Support mechanism) on industries with high energy consumption such as steel, chemicals and paper manufacturing. 

The Industrial Strategy document confirmed that the government will continue support for the scheme and will conduct a review of it by the end of this year. 

This review will set out how the government plans to continue supporting energy-intensive industries when the UK CBAM is implemented in 2027. 

Industrial Energy Transformation Fund

Launched in 2020, this fund is designed to help businesses with high energy use to cut their energy bills and carbon emissions through investing in energy efficiency and low carbon technologies.

The latest phase of funding launched in January 2024, and last year’s Autumn Budget dedicated £163 million to continue the Fund over 2025-26 to 2027-28. 

Mineralogical & Metallurgical (MinMet)

In this scheme, taxable commodities used in mineralogical or metallurgical processes are exempt from the main rates of climate change levy.

The exemptions are to ensure the UK tax treatment of highly energy intensive processes is in line with tax treatments elsewhere in Europe.

How can Inspired help?

Although substantial cost reduction opportunities are on the horizon, next steps are yet to be announced regarding some of them, such as the eligibility requirements of the British Industrial Competitiveness Scheme and the application window of the new CCA scheme. 

Now is the time to ensure you can leverage these forthcoming opportunities, from reviewing your non-commodity costs to improving your energy efficiency.  

Our Forensic Energy Cost Audit will scrutinise all your non-commodity costs and review your eligibility for levy exemptions like the CCA, EII and MinMet. Our experts will analyse your present and past energy non-commodity costs for past errors of up to six years prior, and you could also benefit from ongoing savings. This service operates on a share of savings basis, so if we find nothing – there is no fee. 

The new CCA scheme is expected to create considerable interest, which means you need a strong application. Engaging with Inspired’s CCA service now can help you navigate the scheme to ensure you can claim your CCL discount.   

With a strong track record of supporting some of the UK’s largest and most complex energy users, Inspired is an expert energy partner to over 500 manufacturers – from procurement support and uncovering billing errors to improving site efficiency.