Pressure on Britain’s struggling steelmakers will be eased thanks to Government plans to exempt them from crippling environmental taxes which hike up their power bills.
Energy intensive industries (EIIs) such steel and chemicals will not have to pay the levies included in power bills under policies such as the renewables obligation and feed-in tariff, which are intended to promote the use of green energy.
More than 5,000 jobs have gone in Britain’s struggling steel industry this year with companies citing the high cost of energy as a major factor behind the job losses, along with being unable to compete with cheap imports and a glut of supply from China.
Steelmakers have been campaigning for action on both fronts, but say measures to cut their energy bills – some of the highest in Europe - could be imposed quickly and offer instant relief.
In the Autumn Statement Chancellor George Osborne said EIIs would be permanently exempted from green levies, a move which would “keep their bills down, keep them competitive and keep them here”.
Industry body UK Steel gave a cautious welcome to the move, with director Gareth Stace calling it a “good first step”.
However, he added: “This is not a silver bullet that will save Britain’s steel industry. We need action on other measures that the industry has been asking for."
The Government is currently trying to win EU approval to pay compensate to steelmakers for the green levies they curently pay in their energy bills, to give them some early relief. European approval is required to do this as it is classed as state aid.
Mr Stace said the exemption announced by the Chancellor in the Autumn Statement would not come into effect until next year and ultimately, pressure will remain on the steel industry until EU approval is given for state aid.
Source: www.telegraph.co.uk