The UK has been granted permission by the EU to provide state aid compensation to the nation’s energy intensive industries (EIIs) for the cost of green taxes.
The package is worth around £280 million until the end of the decade.
The news comes as the government aims to give more certainty to the UK steel industry around energy costs as weak prices and high costs have prompted a number of plants to close in the country.
It follows Chancellor George Osborne’s announcement to exempt EIIs from the policy costs of the Renewable Obligation and Feed-in Tariff schemes. Compensation will continue to be paid until the exemption is in place.
Business Secretary Sajid Javid said: “This is very welcome news and meets a commitment we made to deliver energy compensation for the steel industry by the end of the year. Relief from energy costs will save our steel industry hundreds of millions of pounds.
“This comes on top of action we have taken in recent months on procurement, anti-dumping and EU emissions directives, as we do all we can to give our steel industry and workers a more secure and sustainable future.”
Terry Scuoler, Chief Executive of the manufacturers’ organisation EEF added the announcement “sends a very important signal” that the government is backing steel and “continue to support the industry at this challenging time”.
The government will publish guidance in January 2016.