New compensation guide for major energy users

The guidance is being published alongside the government response to its consultation on a £250m Energy Intensive Industries Package. Eligible firms can apply as part of measures to reduce the impact of energy and climate change policies on the cost of electricity for energy intensive industries in the UK. The guidance sets out how businesses can claim compensation from the first tranche of the £250m for the indirect costs of the EU Emissions Trading System (EU ETS). Up to £113m has been allocated for this scheme.

Business and Energy Minister, Michael Fallon said: “Energy intensive industries are a critical part of the UK economy. It is essential that as we put in place policies to generate the necessary investment in energy infrastructure we do not undermine the competitiveness of UK industry.

The government has also committed to establishing a compensation scheme to address the indirect costs of the Carbon Price Support (CPS) mechanism, subject to state aid clearance. That scheme is currently being considered by the European Commission and will be announced later this year. Applications for the EU ETS scheme can now be submitted. The deadline for applications for compensation which includes costs incurred from the 1 January 2013 will be the end of July. Applications received after the end of July will not be considered for costs already incurred.