Mills could get energy relief under BEIS plans

The Department for Business, Energy and Industrial Strategy (BEIS) has begun consulting on plans to offer relief on energy bills to “high electricity-using businesses”, including paper and glass mills.

Mills are energy intensive and are being impacted by high energy prices

News of the potential relief comes as BEIS admits that there are “higher UK industrial electricity prices than those of other countries, including in Europe”.

The department is consulting on increasing the level of exemption for certain environmental and policy costs from 85% to 100%.

The plans could be significant for recyclers as they could help mills take less downtime, meaning they will be able to process more material domestically.

Business secretary Kwasi Kwarteng said: “British manufacturers are the lifeblood of our economy and central to our plans to overcome this period of economic uncertainty.

Kwasi Kwarteng, secretary of state for BEIS (picture: Pippa Fowles)

“With global energy prices at record highs, it is essential we explore what more we can do to deliver a competitive future for those strategic industries so we can cut production costs and protect jobs across the UK.”

Dr Simon Ellin, chief executive of the Recycling Association, told letsrecycle.com he was “pleased” to see BEIS launch the consultation, which will run until 16 September, as high energy costs “could price UK mills out of business”.

Consultation

Announcing the launch of the consultation this morning (12 August), BEIS claimed its proposals would help around 300 businesses, supporting 60,000 jobs in the UK’s “industrial heartlands”.

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It is hoped the initiatives will help UK mills stay competitive against those in Europe and further afield

These businesses include mills processing steel, paper, glass, ceramics and cement, as the department says energy costs “risk them relocating from the UK”.

In short, the relief would be funded by reducing the costs of contributing towards the contracts for difference, renewables obligation and feed-in tariffs schemes.

These are domestic energy and climate change policies, “designed to encourage investment in low carbon and renewable electricity generation to enable the UK to meet its ambitious and legally binding decarbonisation targets.”

Mills

Via the consultation, the UK government has suggested that it is determined to help mills stay competitive with rivals in Europe and those further afield.

This would enable mills to remain open in the UK and, on the recycling front, keep material from having to be exported.

Many recyclers have already reported that mills are taking extended downtime periods this summer, partly brought on by higher energy costs, as well as changing consumer habits. This is already starting to have an impact on the price paid for recycled material (see letsrecycle.com story).

These high energy costs could price UK mills out of business

  • Simon Ellin, Recycling Association

Market

Speaking with letsrecycle.com, Dr Ellin explained that the proposals could help mills stay competitive, while also helping the two mills due to come online in Shotton and Telford.

Dr Simon Ellin is chief executive of the Recycling Association

Dr Ellin said: “It is interesting to see BEIS acknowledge that we are facing the highest energy costs in Europe. This is having an impact on mills, which are taking significant downtime this summer.

“The government is trying to redress the balance in the export market and having a mechanism in place to help with energy costs will help with this. Mills need to stay competitive. We have two mills coming online, and if energy costs keep going up as much as they are, it could make things difficult.

“If we are serious at keeping more materials in the UK, which all the consultations say we should be doing, then these high energy costs could price UK mills out of business. I’m pleased to see this consultation help with this, but as ever the devil is in the detail.”

Related link
Review of the energy intensive industries exemption scheme 

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