Meat industry encouraged to claim compensation

Meat businesses operating within Energy Intensive Industries (EIIs) are being told that they could benefit from a government scheme to improve their competitiveness. 

Businesswise Solutions, a business energy management specialist, has recognised eligible sectors that could be entitled to substantial compensation on electricity. One such sector is manufacturers of meat, who operate under restricting environmental taxes, according to Businesswise Solutions.

“The rebates are a partial unwinding of the government’s Renewables Obligation (RO) and Feed-in-Tariff (FIT) schemes for EIIS, put in place to meet targets to reduce the country’s greenhouse gas emissions by at least 80% by 2050,” explained Peter Catlow, Businesswise Solutions’ director of cost management.

However, this has originally resulted in increased electricity prices for businesses operating within the meat industry. Businesswise Solutions said the government recognised the damage that this could have on high energy-using businesses, and is committed to providing compensation to these RO and FIT levies – which represent approximately 15-20% of a business’ electricity bill.

“Energy Intensive Industries have long argued that these environment taxes impose a financial burden, which is not suffered by their international counterparts,” added Catlow.

“This poses a threat to the UK’s competitiveness in manufacturing, so the new government schemes will come as welcoming news to the meat industry. The rates which businesses pay for their energy are made up of various items of which significant elements are RO and FIT – green levies.

“On average, these might represent 1.5p to 2p kwh of a business’ say 10p kwh spend – so in effect 15/20% of their spend is green tax; a large amount when you consider such high-intensity usage over a year.

“We’re currently speaking with a customer who uses 20Gb of energy per year, and if we estimate that they could be eligible for a rebate of 2p per kwh, then they are looking at a refund of £400,000,” continued Catlow. “And that is not a one-off payment; the rates set from the outset will apply for the foreseeable future, as to date no cap has been announced.”

However, the business recognised that the actual rebates per kwh may vary, as the government is calculating rebates based on average RO and FIT rates over the past three years.

To calculate eligibility, companies have to be classified under an appropriate NACE (European Trade Classification) code. The UK government and the European Union have identified these codes as being EIIs, and they must demonstrate that they meet the criteria for energy usage intensity.

Businesswise Solutions claimed the compensation would largely remove the impact the renewables policy is having on the cost of electricity for the most energy-intensive industries.

The processing and preserving of poultry meat sectors of the industry can apply for compensation via a two-stage application process. The Department of Business, Innovation and Skills (BIS), which is promoting and funding the schemes, has put together a set of guidance notes that set out the processes to be followed to check, which will hopefully confirm their eligibility for financial assistance.

“Businesses who are eligible for compensation are encouraged to apply straight away in order to take maximum advantage of the rebate; the first step is to provide financial information, which provides a rough and ready assessment of eligibility, and this data should be readily available from the company accounts department.”

For more information about how your company can benefit from compensation, please contact peter@businesswisesolutions.co.uk

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