Energy Intensive Industries Scheme

Energy Intensive Industries Scheme (EIIs) are being urged to claim their share of a multi-million pound compensation package following approval from the EU.

As you are no doubt aware, EIIs have long argued that the environmental taxes they pay impose a financial burden not suffered by their international counterparts. As such, they pose a threat to the UK’s competitiveness in manufacturing and we’re certain that the compensation announcement comes as welcome news to your own high energy use business.

Could you be eligible for substantial compensation on your electricity?

Why is the Government issuing compensation?

The Government has a duty to reduce the country’s greenhouse gas emissions by at least 80% by 2050. To help reach this figure, businesses are being incentivised to generate electricity from renewable sources. The Government has put in place Renewables Obligation (RO) and Feed-in-Tariff (FITs) schemes in order to incentivise renewable energy supplied through the National Grid.

It recognises, however, that in the short to medium term, the resulting increase in retail electricity prices risks reducing the competitiveness of the UK’s most electricity-intensive businesses when operating in internationally competitive markets.

As a result, the Government has committed to providing compensation to negate the impact the renewables policy will have on the costs of electricity for the most energy intensive industries, in line with EU ruling.

Hundreds of Millions of Pounds expected to be paid in Compensation

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Am I eligible?

To qualify for compensation, you have to operate in certain specified industrial sectors which have been identified as intensive users of electricity, as well as passing a test designed to assess the level of your intensity. This includes certain historical (3 years) financial data related to energy costs, wages, EBITDA and other related costs.

What sectors does the compensation apply to?

A large number of EIIs are eligible for compensation within the sectors. In layman’s terms, a majority of manufactures in the UK will be eligible.

How do I apply?

As this scheme is being promoted and funded by the Department of Business, Innovation and Skills (BIS) there is a two stage application process to go through. We will need to request information from you, primarily financial, which should be readily available from your accounting system. As such, we simply require the assistance of someone from your business who can help us obtain relevant data.

Is it time-consuming?

Honest answer, yes, however as with most government based schemes there is a lot of red tape involved but we have experienced auditors that have successfully submitted applications for a high volume of clients and we understand the process.