The Informer

Moves to exempt energy intensive industries (EII) from paying towards the cost of the Renewables Obligation (RO) have been delayed.

The Department for Business, Energy & Industrial Strategy (BEIS) confirmed that the RO exemption won’t be introduced until 1 January 2018 at the earliest.

Plans to exempt EIIs from the costs of the Contracts for Difference (CfD) and Feed-in Tariff (FiT) are also underway but these are not included in the latest update from BEIS.

The exclusions had been due to be introduced on 1 April 2017 to replace previous measures.

BEIS blamed the delay on state aid discussions with the European Commission taking longer than expected.

EIIs include cement, glass and steel companies.

‘Cost disadvantage’

BEIS said: “Competing businesses in other countries may not be subject to similar energy and climate change policy costs.

“The Government has sought to lessen the cost disadvantage faced by EIIs as a result of energy and climate change policy costs, relative to their European Union and international competitors, through a compensation scheme.

“A move to an exemption scheme is proposed in order to increase the certainty and effectiveness of support to EIIs.”

But Gareth Redmond-King, head of climate and energy policy at WWF-UK, warned: “It’s bad for businesses and bad for hardworking families. It will add money to household bills and heap costs onto small businesses.

“These costs would otherwise have been borne by large businesses, but now will be redistributed to be paid for by those who may already be struggling with high energy costs.

“Whilst EIIs are important to our economy, they also contribute huge amounts of greenhouse gases to UK emissions.

“It is only right that they pay their fair share to support the building of the cleaner, greener energy infrastructure that we need for our future.”

> Read the UK Government's consultation response