What did the Autumn Statement say about energy? 

On 26 November 2025 Chancellor Rachel Reeves presented her Autumn Budget to the House of Commons. Here are some of the energy and decarbonisation highlights.   

Business energy bills 

• The budget document acknowledged the recent government decision of an uplift in relief through the Network Charging Compensation Scheme from 60% to 90%. 
• Eligibility criteria for the British Industrial Competitiveness Scheme – which is expected to reduce costs for eligible businesses by between £35 per MWh and £40 per MWh – are currently under consultation. This scheme is set to provide eligible manufacturing businesses with exemptions from the indirect cost of the Renewables Obligation, Feed-In Tariffs and Capacity Market schemes.  

Climate change Levy

• Following a consultation from the 2025 Spring Statement, electricity used in electrolysis to produce hydrogen as well as natural gas as a source of CO2 to produce sodium bicarbonate will be added to the Climate Change Levy non-fuel use exemption. Subject to parliamentary approval, these amendments will be in force by Spring 2026.  

Domestic users

• The government will fund 75% of the cost of the Renewables Obligation to households in 2026-27, 2027-28 and 2028-29.   
• The government is not continuing the funding of the Energy Company Obligation on bills after March 2026. £1.5 billion of new funding to support households facing fuel poverty is set to be announced.  

Energy industry

• Oil and Gas Price Mechanism: The government has confirmed that the temporary Energy Profits Levy (EPL) will be replaced by the permanent Oil and Gas Profits Mechanism (OGPM). The OGPM will be a revenue-based mechanism which only operates in times of high prices and will replace the EPL when it ends in 2030, or earlier if the EPL price floor triggers. The rate will be 35% with thresholds of $90/barrel (oil) and 90p/therm (gas).
• Wylfa in Anglesey, North Wales, will host the UK’s first small modular reactor project.  
• Nuclear added to Green Financing Framework: The government has updated the Green Financing Framework to add nuclear energy for power generation to the list of policies eligible to be funded by green gilts and retail Green Savings Bonds. 
• Carbon Price Support 2027-28 rates: The government will freeze the Carbon Price Support rates in Great Britain at a level equivalent to £18 per tonne of CO2 in 2027-28. 
• Offshore oil and gas licensing: Alongside the Budget, the government has published North Sea Future Plan, which sets out actions to support ongoing investment opportunities in oil and gas. 

Decarbonisation

• Carbon Border Adjustment Mechanism (CBAM): The government will legislate in Finance Bill 2025-26 to introduce the CBAM from 1 January 2027. The inclusion of indirect emissions within scope of the CBAM will be delayed until 2029 at the earliest.
• Private finance for decarbonisation of the public sector estate: The government has confirmed private sources of finance – including Public Private Partnerships – will be considered to decarbonise the public sector estate (alongside or in place of government capital expenditure), where these offer “value for money.” HM Treasury will consider proposals based on business cases from relevant departments.

Vehicles and transportation

• Fuel duty: 2026-27 main rates: The government will extend the temporary 5p fuel duty cut for a further five months, with the cut being reversed in three stages: 1p on 1 September 2026, 2p on 1 December 2026 and 2p on 1 March 2027. This will return rates to pre-March 2022 levels. The planned inflation increase for 2026-27 will not take place, with the government uprating fuel duty rates by Retail Prices Index (RPI) from April 2027.
• Electric Vehicle Excise Duty (eVED): The government announced a new mileage charge for electric and plug-in hybrid cars, which will take effect from April 2028. This consultation sets out further detail on how eVED will work and seeks views its design and implementation. A consultation setting out further detail on how eVED will work will run until 18 March 2026. 
• Review of public EV charging cost: The government will review the cost of public electric vehicle charging, looking at the impact of energy prices, wider cost contributors, and options for lowering these costs for consumers. The review will start in Q1 2026 and report by Q3 2026. 

What happens next?

Whilst the impacts of some of today’s announcements are to be seen, we continue to monitor the situation as the relevant policy papers are published.

Where can I find more information?

The full Budget 2025 document is available on the gov.uk website.