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Lowering costs for business is ‘the biggest challenge’ faced by BEIS

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The Department of Business, Energy and Industrial Strategy (BEIS) is prioritising lowering the cost of decarbonisation for businesses, according to a senior civil servant who has claimed that getting costs down is “the biggest challenge” faced by the department.

Nigel Pargiter, acting head of energy supply chains at BEIS, was speaking at the annual NOF Energy Conference earlier this month when, according to North East local new outlet The Chronicle, he claimed industry had been neglected in favour of decarbonisation efforts.

“We got stuck on the trilemma. This became a sticking point, there was not one department to think holistically and this resulted in tension,” he said.

“Our view now is that decarbonisation has a cost to domestic users and businesses and our focus now is on ‘how much can industry bear before it is too much, and decides to go elsewhere?’”

In his earlier address to the conference, Pargiter had said: “The key challenge for us all is how do we get costs down and away from the subsidy regime. This is the biggest challenge we face and one that can be tackled by government and industry working together.”

His comments follow a recent and much derided report from the House of Lords Select Committee on Economic Affairs which claimed that providing cheap and secure energy to homes and businesses should be placed above concerns for the environment.

The report was dubbed ‘out of touch’ and ‘backward-looking’ by critics, and raised questions over why other reports in favour of renewables were left out of the Lords’ final publication.

A BEIS spokesperson would not be drawn on the subject when asked if Pargiter’s comments meant the government had followed the report’s advice and placed lowering costs over decarbonisation. Instead, they pointed to the department’s plans for a ‘road map’ to cut costs as part of the government’s industrial strategy.

“We are investing in energy innovation and remain committed to supporting the competitiveness of the UK’s energy-intensive industries. Our Industrial Strategy green paper announced the publication of a road map later this year to minimise business energy costs over the long term and help us meet our climate change targets in the most cost-effective way.”

The green paper set out plans for a review of the opportunities to reduce the cost of achieving the country’s decarbonisation goals, with previous efforts already allowing the most energy intensive industries to avoid paying climate change levies.

It is unclear when this review will be commissioned while the government’s delayed Emissions Reduction Plan, which will set out how the UK will meet its legally binding carbon reduction commitments, is also likely to impact the private sector’s emission reduction efforts.

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