More big energy users to get help as support plan expanded

More Big Energy Users to Get Help as Support Plan Expanded

The UK government has unveiled an expanded support plan for energy-intensive businesses, set to begin in April 2027. This follows the announcement of a broader initiative to assist companies, initially proposed in 2025, which now targets around 10,000 manufacturers in sectors such as steel and pharmaceuticals. The scheme aims to reduce energy costs by up to 25% for qualifying firms, doubling the original target of 7,000 businesses.

The expansion comes amid rising oil and gas prices, though the surge has not reached the peak seen after Russia’s invasion of Ukraine. While gas and oil costs have since stabilized, critics argue the measure falls short. The Conservative Party highlighted that pubs, restaurants, farmers, and retailers—already facing financial strain—will not benefit from the support.

“When global instability puts businesses under pressure, we’ll always do what’s needed to support them and ensure Britain’s resilience,” said Business Secretary Peter Kyle.

Eligible firms will receive exemptions from electricity charges that fund the net zero transition, costing £35–£40 per MWh. Additionally, they will be granted a one-time payment in 2027 to cover support that would have been available if the scheme had launched a year earlier. Funding will come from energy system reforms and government spending, with no direct impact on household bills.

The war in Iran contributed to a sharp increase in energy prices, but the rise was less severe than during the post-Ukraine conflict period. Despite this, UK businesses still pay up to 50% more for electricity than their EU counterparts and over double the rate US firms face. The Confederation of British Industry’s chief executive, Rain Newton-Smith, called the expansion “a significant step,” emphasizing the government’s responsiveness to industry concerns.

However, some industry leaders remain critical, stressing that broader action is required. The British Chambers of Commerce reported that four in ten businesses across all sectors are struggling with energy costs. Shadow Energy Secretary Claire Coutinho argued the plan benefits only 0.2% of firms and suggested reducing green levies to lower electricity prices, thereby easing the cost of living and boosting economic growth.

The British Industrial Competitiveness Scheme (BICS) will cost £600 million, with businesses able to check eligibility via their Standard Industrial Classification code on the government business department’s website. The measure is intended to bolster economic security by supporting high-energy users in industries like automotive, aerospace, steel production, and cooling equipment manufacturing.