support scheme targeted at non domestic customer of UK

 The support schemes targeted at non-domestic customers, including the steel
industry, are:
• Energy Bill Relief Scheme (EBRS): a discount on non-domestic
electricity and gas unit prices over the period 1 October 2022 to 31 March
• Energy Bill Discount Scheme (EBDS): will apply from 1 April 2023 to 31
March 2024, replacing the Energy Bill Relief Scheme (EBRS). The EBDS
will provide a discount on non-domestic electricity and gas unit prices
from 1 April 2023 to 31 March 2024. The discounts available under the
EBDS will be lower than those currently available under the EBRS.
• Alternative Fuel Payments: a one-off payment of at least £150 for nondomestic customers who are not on the mains gas grid and use an
alternative fuel for heating. The Government has also said that a ‘top up’
payment will be available for large users of heating oil
UK Steel, trade body for the sector, welcomed the certainty brought by the
recent announcement of the EBDS, saying it provides “a critical shield against
high energy prices, which will continue this year and beyond.

” UK Steel also
Source: International industrial energy prices, BEIS
Industrial electricity prices for very large consumers
Pence per Kwh including taxes and levies
H2 H1
H2 H1
H2 H1
H2 H1
H2 H1
H2 H1
H2 H1
EU28/EU27 and UK
Contribution of the steel industry to the UK economy
12 Commons Library Debate Pack, 23 January 2023
say, however, that the support “falls short of that of competitor countries,
including Germany” and that the UK industry was already at a competitive
disadvantage with international competitors due to “disproportionate costs
UK steel producers face in electricity bills, including high renewable levies
and network costs.”23
Detailed information about each scheme is provided in the Library briefing
Constituency casework: Government support for energy bills.
Support for energy intensive industries
The main support measure for energy intensive industries’ electricity costs is a
series of exemptions and compensation. The Government provides
compensation or exemptions to energy intensive industrial users for the
indirect costs (higher electricity prices) associated with funding certain
decarbonisation policies. The policies include the climate change levy,
contracts for difference mechanism, renewables obligation, and feed in
The Government said in March 2022 it had provided the steel sector with more
than £600 million of relief since 2013 to make energy costs more

Further information from the Government is available at the following links:
• Guidance on exemption from the indirect costs of funding Contracts for
Difference, the renewables obligation and small-scale feed-in tariffs :
The Government held a consultation on increasing the level of this
exemption from 85% to 100% of environmental and policy costs from
August to September 2022. It has not yet published its response.
• Compensation for the indirect costs of the UK Emission Trading Scheme
(UK ETS) and the Carbon Price Support (CPS) mechanism (June 2022). In
April 2022 the Government announced that it would extend the
compensation scheme for three years until March 2025.
25 It also said the
scheme’s budget would be more than doubled, and that companies
manufacturing electric vehicle batteries would be included in the scheme
for the first time.26
23 UK Steel Press Release, Extension of Government energy scheme is welcome but falls short
compared to Europe, 9 January 2023
24 PQ 141979

, [Iron and Steel: Carbon Emissions], 17 March 2022. This includes reductions in the indirect
costs due to the Contracts for Difference, Renewables Obligation and Small-Scale Feed-In Tariff and
compensation for the indirect emission cost due to the UK Emission Trading System and Carbon
Price Support mechanism (PQ 170785, [Iron and Steel: Electricity], 17 March 2021
25 BEIS, Consultation outcome: Review of the schemes to compensate energy intensive industries for
indirect emission costs in electricity prices, 29 April 2022
26 BEIS, Press release: High energy usage businesses to benefit from further government support, 29
April 2022
Contribution of the steel industry to the UK economy
13 Commons Library Debate Pack, 23 January 2023
The Commons Library debate pack on Energy Intensive Industries (November
2021) gives an overview of wider support for industrial energy costs.27
Steel industry decarbonisation
Decarbonisation of the steel industry is an important part of reaching the
Government’s target to achieve net-zero greenhouse gas emissions in the UK
by 2050. The steel industry is a significant contributor to greenhouse gas
emissions, responsible for 14.2% of greenhouse gas emissions from
manufacturing and 2.4% of total UK greenhouse gas emissions.
28 Steel is also
an important part of a low-carbon economy, being needed to make wind
turbines, electric vehicles, energy efficient products and infrastructure. 

In addition to being an energy intensive industry, requiring a lot of electricity
and other fuel sources, the steel industry faces particular challenges to
decarbonise blast furnaces that use coal as a raw material (Box 1).
The Climate Change Committee (who advise the Government on
decarbonisation) said in its policy recommendations for the 6th Carbon
Budget that the Government should adopt a target that all iron-ore based
steelmaking be near-zero emissions by 2035.
In addition to the possibility of using more recycled material in electric arc
furnaces, there are a few alternative methods being developed to reduce the
emissions from the steel making process. Some of the options under
development globally are summarised in the World Steel Association’s policy
paper: Climate change and the production of iron and steel (2021), including:
• Hydrogen as a reducing agent - Avoids carbon and uses hydrogen to
reduce iron ore, thereby averting the creation of CO2, and producing H2O
(water) instead. 

• Carbon Capture and Storage (CCS) - Generates a clean and
concentrated CO2 stream that can be captured and stored. The process
involves retrofitting steel plants with capture technology and requires
the development of transportation networks and access to storage sites.
• Carbon Capture and Utilisation (CCU) – Uses the components of the coproduct gases from existing processes to produce fuels or input material
for the chemical industry.
• Biomass as a reducing agent - Can partially substitute coal for biomass
such as charcoal.
27 CDP 2021-0195, pages 9-11 28 ONS, Atmospheric emissions: greenhouse gases by industry and gas, 1 November 2022; SIC 24.1-3:
manufacture of basic iron and steel.
29 Committee on Climate Change, Sixth Carbon Budget, 9 December 2020.
Contribution of the steel industry to the UK economy
14 Commons Library Debate Pack, 23 January 2023
• Electrolysis – Reduces iron ore using electricity

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