Yesterday (9 January), chancellor Jeremy Hunt announced that the new Energy Bills Discount Scheme will, from April, replace the more generous Energy Bill Relief Scheme. The new scheme will run for 12 months.

Eligible non-domestic users will receive a per-unit discount, subject to a maximum. 

The maximum discount for ‘ordinary’ businesses has been set as follows: electricity is £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh; and gas is £6.97/MWh with a price threshold of £107/MWh.

Certain power-hungry sectors – the Energy and Trade Intensive Industries – will receive enhanced support, thus: electricity - £89/MWh with a price threshold of £185/MWh; gas - £40/MWh with a price threshold of £99/MWh.

Manufacturing of pulp, paper and corrugated paper and board are included in the list of businesses eligible for enhanced support under the ETII scheme, as is the ‘manufacture of paper stationery’.

BPIF CEO Charles Jarrold commented: “The good news is the main support scheme is not sector-based, and that’s something we pushed hard for.

“The less good news is that our sector does not, in general, qualify as ETII. Energy intensity varies enormously across print because it’s such a diverse sector. It’s important companies look at their SIC codes to check whether in good faith they believe they qualify for enhanced support.”

Jarrold said the BPIF would be meeting with BEIS this week to get a better understanding of the details of the fresh scheme. He noted that print bosses who had responded to the BEIS energy survey last October had made a material impact in ensuring the government didn’t stop the scheme entirely.

Industry bosses are now taking stock of the new measures. Chris Hallett, director at data, printing and mailing specialist DMCS in Sevenoaks, commented: “Energy prices in time should stabilise and the ‘support package’ seems adequate.

“We will inevitably have inflation with the necessity of price increases being passed on, but do not see reasons that ‘energy costs’ should disproportionally affect the print industry,” he said.

“There will be some casualties through a recession but we feel output volumes will continue to increase this year.

“Historically in a recession, marketing holds up and maybe people will switch off their digital devices, read a book or play a board game.”

BEIS also said that it would publish further information on the ETII scheme by the end of March, “including guidance for firms that believe their operations are not correctly classified by Standard Industry Classification (SIC) code”.

The Confederation of Paper Industries (CPI) welcomed the extension of the EBRS support programme and especially the support offered to energy and trade intensive industries.

However, the CPI also noted that the support package will only deliver if stability and lower prices have returned to the wholesale energy markets, and warned “if not the risks from price spikes are now transferred to manufacturing companies that may not have the resources to manage the issue.  We urge that the Government keep the situation under close review, being ready to step up the level of support if required”.

Director general Andrew Large commented: “While this additional package of support is welcome, what energy and capital-intensive sites (such as paper mills) really need is a stable economy and confidence that (in the long-term) UK energy prices, and the costs of the net zero energy transition, will be in-line with costs outside the UK.  We understand that BEIS is aware of this issue and we urge that a strategic review of UK energy costs is urgently progressed.

“The bio-based and recyclable paper sector offers huge opportunities to support the development of a net zero circular economy, but we need secure energy supplies that are internationally competitively priced – and this is not the case at the moment.”

The current relief scheme, which could cost up to £18bn, had been described as “unsustainably expensive” by Hunt.  

In its explainer about the fresh plans, BEIS stated: “The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5bn based on estimated volumes.”

However, the Federation for Small Businesses (FSB) described the new offering as “feeble” and a "catastrophic move”.

FSB national chair Martin McTague said that many small firms will not be able to survive on the “pennies provided through the new version of the scheme”.

“While the new year should be a time of optimism and excitement, 2023 looks like the beginning of the end for tens of thousands of small businesses, which have been relying on the government energy support to survive this winter,” he stated. 

“Our latest research shows one in four small firms anticipate either closing, downsizing, or radically changing their business model when the government reduces energy support after March.

“It would have been better value for money for small firms if the £2bn cost of their element of the scheme had been used to improve energy efficiency, to reduce the need for energy from the grid.”

He added: “The government said that taxpayers cannot prop up failing or unproductive firms, which is insulting to many small business owners struggling this winter.”

The list of sectors eligible for enhanced support spans coal mining to botanical gardens. It also includes makers of dyes and pigments, and the manufacture of plastic sheets, and plastic packaging. The full list can be found here.

BEIS said that the level of support would vary depending on the type and date of contract. It gave three examples.

Example 1: A pub. A typical pub uses 16 MWh of gas and 4 MWh of electricity each month. Under the new scheme, it could receive up to £2,280 of taxpayer funded support in the 23/24 financial year.

Example 2: A small retail shop. A typical small retail store uses 2 MWh of gas and 1 MWh of electricity each month. Under the new scheme, it could receive up to £403 of taxpayer funded support.

Example 3: A medium sized manufacturing business. A medium sized manufacturer uses 1,600 MWh of gas and 200 MWh of electricity each month. Under the new ETII scheme, it could receive up to £687,120 of taxpayer funded support.