What's Happening?
The Confederation of British Metalforming (CBM) has warned that downstream manufacturers in the UK will face significant increases in electricity costs due to new non-commodity charges. These changes include the Balancing Services Use of System charge and the Nuclear RAB 'stealth tax', which will appear on electricity bills starting November. The CBM represents over 200 manufacturers and is concerned that these costs will disproportionately affect its members, who are not classified under the Energy Intensive Industries scheme. The organization is advocating for changes to the Standard Industrial Classification codes to provide support to these manufacturers.
Why It's Important?
The increase in electricity costs poses a substantial financial challenge for downstream manufacturers, who are already dealing with high energy prices compared to other G7 countries. This situation could lead to reduced competitiveness and financial strain for these businesses, potentially resulting in closures or downsizing. The government's focus on supporting Energy Intensive Industries may leave smaller manufacturers vulnerable, highlighting the need for broader support measures. The impact on the manufacturing sector could have ripple effects on employment and economic stability in the UK.
What's Next?
The CBM is urging the government to take immediate action to address the rising energy costs and prevent industrial disruption. The organization is working with Greenfields Energy Group to educate its members on the upcoming changes and potential strategies to mitigate the impact. The government may need to consider revising its energy policy and providing relief measures to support downstream manufacturers. Stakeholders will be closely watching for any government announcements or policy adjustments in the coming months.
