The Chemical Industries Association welcomes today’s announcement confirming £420 million a year in support to reduce electricity costs for the UK’s most energy intensive industries.

This is a positive step that recognises the competitiveness challenge facing many UK manufacturing sites. However, it is essential that any support does not get negated by tax increases in the Budget. There is also a desperate need for further intervention, as many UK operations face risk of closure before the British Industrial Competitiveness Scheme (BICs) comes into effect in 2027. At the same time, there remains considerable uncertainty about which businesses will benefit from this new support and how it will be funded.

Action on policy and network costs for those eligible to receive this new support means that the remaining price differential between the UK and other countries relates to the wholesale cost, to that end we very much welcome the recommendation to pursue a fixed price energy scheme for those businesses most affected and urge government to deliver this within the next six months.

The UK’s chemical sector underpins key supply chains across manufacturing and clean growth. Ensuring affordable and reliable energy for our industry is critical to protecting jobs, investment and the country’s long-term competitiveness.

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