On 17 June 2025, the UK government announced a significant package of reforms to green levies and grid charges, aiming to bring down energy bills for manufacturers and enhance the competitiveness of British industry.
The reforms are expected to benefit over 7,000 energy-intensive businesses across sectors including steel, glass, ceramics, paper, chemicals, and aerospace. Under the new plans, companies will receive increased exemptions from environmental and policy levies, with network charge discounts rising from 60% to 90% by 2026.
In addition, a £2 billion support fund will be set up to ease the transition and ensure affordability during the implementation phase. The changes will take effect from 2027, and the government has said the reforms could reduce energy costs for some businesses by up to 25%.
The move is intended to safeguard UK industry from rising energy prices and encourage investment in low-carbon manufacturing. The government claims this will boost the economy, protect skilled jobs, and help businesses decarbonise in line with net zero goals.
Critics, however, have warned that removing green levies from large industrial polluters could risk undermining the “polluter pays” principle, unless balanced with strong carbon reporting requirements and investment in clean energy. Ministers have stated that environmental standards will not be relaxed and that the reforms are aligned with long-term emissions reduction targets.
Further legislation and guidance are expected later this year to support businesses in accessing the new exemptions and ensure fair implementation across the sector.
