The Committee is inquiring into the link between high UK energy costs, decarbonising UK business and industry and driving badly-needed economic growth.
The Committee has heard evidence that the high cost of energy for business and industry in the UK is a drag on economic growth and is driving up wider prices. Recently announced support measures for the chemicals and ceramics sectors are an encouraging sign that Government recognises the central challenge: electricity prices will also dictate the pace of decarbonisation.
But while such targeted support offers a potential wider model, linking help with energy costs to incentives for cleaner production, it also highlights the absence of a broader strategic framework for industrial electrification and decarbonisation across manufacturing.
- The new BICS scheme is not designed to drive electrification and decarbonisation and may be better understood as short-term relief.
- The EII Supercharger also provides important relief for some energy-intensive industries, but many manufacturers remain outside its scope.
- The long-awaited Industrial Decarbonisation Strategy, which remains unpublished and may not provide the clarity or scope industry needs.
Small and Medium-sized Enterprises make up 99% of businesses in the UK, and account for over a third of the UK’s greenhouse gas emissions.
But rising cost pressures are limiting SME’s ability to drive growth in local economies and contribute to the UK’s net‑zero transition. Many firms are postponing or scaling back green investment, and NatWest’s latest growth tracker shows that only 30% of firms now consider sustainability a high priority, the lowest since early 2020.
So how can Government properly incentivise and drive national decarbonisation targets that will be delivered by the UK private sector?