The Department for Business, Energy and Industrial Strategy has admitted that it is still locked in negotiations with the European Union over an exemption for energy intensive industries (EII) from costs added to electricity bills.
Last April the government confirmed that it intended to make EIIs exempt from the added costs on energy bills associated with the Renewables Obligation and feed-in tariff.
This exemption was to replace the current rebate scheme and then-business secretary Sajid Javid said at the time that he “wanted to see progress” on an exemption scheme.
“While we can’t control the global price of steel, we are doing everything we can to help our steel industry, not just on energy costs but also securing flexibility on EU emissions rules and on tariffs,” he said.
But when questioned by MPs in December last year, energy secretary Greg Clark failed to guarantee that the exemption would be in place by the time the current compensation scheme is due to expire on 1 April 2017.
And today – while announcing that legislation had been laid to make EIIs exempt from “a proportion” of the policy costs associated with the Contracts for Difference scheme – BEIS confirmed that discussions with the EU were “continuing”.
“In addition to the support announced today the government is continuing discussions with the European Union about securing further exemptions from policy costs for energy intensive industries. In the meantime a compensation scheme for the policy costs of the Renewables Obligation and Feed-in Tariff schemes remains in place,” the statement read.
The CfD exemption is however forecasted to save more than 130 eligible companies around £100 million each year.