What could the Energy Bills Discount Scheme (EBDS) mean for energy intensive industries?
27 March 2023
Government energy bill support is changing. We’ve broken down what this could mean for energy intensive industries.
For Energy & Trade Intensive Industries (ETIIs), a manageable energy budget is essential to keeping your operations going. In April 2023, the level of Government bill relief you could receive is changing – and you’ll need to take action to ensure you’re getting the right level of support. Read on to learn more about how the new Energy Bill Discount Scheme (EBDS) could impact energy intensive industries.
What is the Energy Bills Discount Scheme (EBDS)?
The Energy Bills Discount Scheme (EBDS) is a twelve-month UK Government scheme, designed to support businesses with the cost of gas and electricity from 1 April 2023 until 31 March 2024.1
The EBDS is intended to replace the Energy Bill Relief Scheme (EBRS), which comes to an end on 31 March 2023. This comes after the Chancellor, Jeremy Hunt, met with industry leaders in January 2023 to discuss the “time-limited” and “unsustainably expensive” level of support offered under the EBRS.2 You can find all the information you need on the new scheme here in our blog.
Why has energy bill support for businesses changed?
To reduce the impact of volatile energy markets on taxpayers, the EBDS includes amended eligibility rules for businesses. For most non-energy and trade intensive businesses, the support threshold for wholesale gas prices has risen. New thresholds have also been introduced for Energy & Trade Intensive Industries (ETIIs), who will need to apply for industry-specific support.
In January 2023, gas and electricity prices fell below these support thresholds for the first time since February 2022 – and are expected to remain so for the foreseeable future. This means that the overall cost of the support package has been cut by an expected £13 billion, providing a more sustainable scheme to support businesses in the short-term.
What is an Energy & Trade Intensive Industry?
If you operate in an energy intensive industry, you’ll need to identify your activities as falling under one of the government’s pre-established ETII categories in order to receive support. Your supplier won’t be responsible for doing this, so it’s important to ensure you’re getting the right level of support based on your operations.
This category covers a range of business types. Several manufacturing sectors are included, such as food and beverage manufacturing, textile manufacturing and industrial manufacturing. Others, such as mining and quarrying and the operation of museums, libraries, historical sites and botanical and zoological gardens may also qualify for support. You can confirm whether you’re eligible by checking your Standard Industrial Classification (SIC) code against the Government’s eligibility list.
What does the EBDS mean for energy intensive industries?
If you’re an ETII, the threshold for receiving support is slightly lower than it is for non-ETII business. The new thresholds that have been introduced for ETII businesses are 9.9p/kWh for gas and 18.5p/kWh for electricity. These can apply to up to 70% of your energy usage, with a maximum discount of up to 4.0p/kWh for gas and 8.9p/kWh for electricity.
This means that, to receive a discount, your energy bill rate doesn’t need to be as high as it would if you were a non-ETII business. As such, you’re likely to receive more support, recognising your reliance on intensive energy usage for everyday operations. To take one example, the Government has outlined that a typical medium-sized manufacturer could receive almost £700,000 of support over the twelve months of the EBDS.3
You’ll need to apply for this support to receive the higher discount that you’re entitled to. We’re expecting the Government’s online application portal to open by mid-April, which you’ll be able to access through the UK Government website. Further information on how the ETII scheme will work is also expected to be published by the government by the end of March 2023.
How we can help
We’re here to support you through this period of uncertainty. In the event that you don’t think your discount is being applied correctly, or if you’re not sure whether you need to take action on applying for ETII support, our team of experts will be happy to help. You can also find advice on managing your energy bills on our website, and find independent support at Business Debtline or Citizens Advice if you need help.
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Additional information
Department for Energy Security and Net Zero, HM Treasury and Department for Business, Energy & Industrial Strategy via GOV.UK, ‘Energy Bills Discount Scheme’, January 2023.
‘Chancellor tells business chiefs energy bill scheme is ‘unsustainably expensive’, The Independent, 4 January 2023.
House of Commons, Hansard’s Parliamentary Debates: The Official Report (9 January 2023, vol. 725, col. 318).
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