Government announces Network Charging Compensation scheme to boost competitiveness and combat carbon leakage

The government has unveiled the final part of the British Industry Supercharger, a comprehensive package of measures aimed at enhancing the competitiveness of British energy-intensive industries by addressing key areas within the energy system that contribute to higher electricity costs compared to international counterparts. The final part of the package is the compensation energy intensive industries receive from a portion of the network charging costs designed to support the energy intensive industry. For the UK glass industry, this is a key step in allowing for continued progress towards decarbonisation.

The British Industry Supercharger encompasses three strategic measures, designed to promote a more competitive and sustainable industrial sector:

Enhanced energy-intensive industries renewable levy exemption scheme: The government will increase the subsidy under the existing EII Renewable Levy Exemption scheme from 85% to 100% aid intensity.

Full indirect exemption from Capacity Market costs: Introduction of a full indirect exemption from the costs associated with the Capacity Market.

Energy-intensive industries Network Charging Compensation Scheme: A proposed compensation mechanism for the charges incurred by Energy-Intensive Industries when using the GB electricity grid through the EII Network Charging Compensation Scheme.

Dave Dalton, CEO of British Glass, says “This comprehensive set of measures is a demonstration of the government's efforts in supporting British industries, including the glass industry. Measures such as these are key in encouraging electrification and reducing carbon emissions in energy-intensive industries. The British Industry Supercharger is a key step forward in securing a sustainable future for the glass industry and helps us on our way to reaching our net-zero targets.”