EEF comments on Government response to the energy intensive industry compensation scheme

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EEF comments on Government’s response to the energy intensive industry compensation scheme for the costs of renewables

Commenting on the Government’s response to the energy intensive industry compensation scheme for the costs of renewables, EEF’s Head and Climate and Environment Policy, Gareth Stace, said;

“This is a welcome and positive step towards the finalisation of the scheme and receiving state aid approval from the EU Commission. Government’s top priority must be achieving this end as soon as possible and making the budget available for payment of compensation. Every month without this compensation costs energy intensive sectors millions of pounds and harms their competitiveness, as these costs are not borne by their overseas competitors. Government has recognised this as an issue and must now recognise the urgency of the situation.

“As we made clear in our response, there are elements of the schemes design that could have been more flexible but, we understand that budgetary constraints and the need to minimise redistributive costs to other electricity consumers will place significant limits on the scope of the final scheme. Crucially, the Government has left open the final decision on the precise electricity price that will be used to assess a company’s eligibility for compensation. We hope to see a noticeable increase from that originally proposed to accurately reflect the higher price, much of industry is now paying.” 

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