CIA responds to Energy Security and Net Zero Committee report on the Cost of Energy

The Chemical Industries Association (CIA) has welcomed the latest report from the House of Commons Energy Security and Net Zero Committee’s inquiry into the Cost of Energy. The report, which examines the affordability of energy for both consumers and businesses, highlights the challenges faced by UK manufacturers due to uncompetitive industrial electricity prices.

In its findings, the Committee notes that the UK has the highest industrial electricity prices in Europe, around four times higher than those in the United States and Canada. It warns that this places UK businesses at a competitive disadvantage, forcing the closure of important production sites and leading to the loss of high-paying, skilled jobs. The Committee also raises concern that government support announced through the British Industrial Competitiveness Scheme (BICs) does not go far or fast enough and that many businesses will not survive until it is introduced in 2027.

The Committee’s report draws on both written and oral evidence from industry, including from the Chemical Industries Association. CIA’s evidence on the impact of high industrial energy prices and the need for timely and targeted support for energy-intensive sectors is referenced in the report’s findings and recommendations.

The CIA said:

”CIA welcomes the Committee’s recognition that UK industry faces a dire and now enduring competitive disadvantage given we incur the highest energy costs in Europe and there’s a gulf between energy costs borne by UK operations, and those of our US and Canadian competitors. The Committee acknowledges the desperate need for significant intervention, given that many UK operations face closure before the British Industrial Competitiveness Scheme (BICs) comes into effect in 2027, and that there remains considerable uncertainty about who will benefit and how it will be funded. To that end we very much welcome their recommendation to pursue a fixed price energy scheme for those businesses most affected, and that it be delivered within the next 6 months.”

Chemistry underpins almost every part of modern life. The industry cracks gases such as methane and ethane to make the building blocks of essential products used across aerospace, construction, renewables, plastics, coatings and food packaging. The Association told MPs that you almost cannot live without chemistry and warned that the closure of key UK production sites affects not only local jobs but also national supply chains, forcing other manufacturers to rely on imports and exporting both jobs and carbon in the process.

The CIA said urgent action is needed to ensure that energy-intensive industries such as chemicals remain viable in the UK, protecting jobs, investment and the country’s long-term capacity to manufacture the products that support daily life.

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