Energy Intensive Industries Compensation Scheme
The Energy Intensive Industries (EII) Compensation Scheme is a UK government subsidy scheme to help industries like steel, chemicals, and paper, with high electricity usage to remain competitive. It provides financial relief on high energy prices caused by carbon emissions taxes, namely the UK ETS and Carbon Price Support.
Its purpose has been to prevent "carbon leakage" (businesses moving overseas) and protect against high indirect carbon costs, with high energy intensity industries being eligible, primarily manufacturing sectors such as steel, glass, wood, paper, metal production/casting, plastics, and chemicals.
Companies or businesses must pass a 20% electricity intensity test (so mean electricity costs must be at least 20% of their Gross Value Added) and they must obtain an EII certificate, which is then passed to the electricity supplier. Once eligible key measures of support might include: 100% Exemption from costs associated with Contracts for Difference (CfD), Renewables Obligation (RO), Feed-in Tariffs (FIT), and the Capacity Market., 60% Compensation for network charging costs (grid usage), relief for costs associated with the UK Emissions Trading Scheme (ETS) and Carbon Price Support (CPS).
See Energy Intensive Industries (EIIs): Guidance for applicants seeking a certificate for an exemption from the indirect costs of funding Contracts for Difference (CFD), the Renewables Obligation (RO), the small-scale Feed in Tariff (FIT), and GB Capacity Market (CM) and Form: Compensation for the indirect costs of the UK ETS and the CPS mechanism: guidance for applicants Updated 17 December 2025
[edit] Related articles on Designing Buildings
- A zero-carbon UK by 2050?
- Black carbon.
- Blue carbon.
- Biogenic carbon.
- Biologic carbon sequestration.
- Carbon capture.
- Carbon cycle.
- Carbon dioxide.
- Carbon emissions.
- Carbon intensity.
- Carbon sequestration.
- Carbon.
- Embodied energy in construction
- Energy balancing.
- Energy Intensive Industries Compensation Scheme.
- Energy supply.
- Energy white paper.
- Geologic carbon sequestration.
- Generation nuclear.
- Net zero and green jobs.
- Net zero carbon 2050.
- Organisations prompt government to Build Back Green.
- Power generation.
- Renewable energy.
- The Government's 10-point plan: what's missing?
Featured articles and news
Electrical contractors welcome crackdown on late payment and push for clean energy.
Cyber Security in the Built Environment
Protecting projects, data, and digital assets: A CIOB Academy TIS.
Managing competence in the built environment
ITFG publishes new industry guide on how to meet the ICC principles.
The UK's campaign to reduce noise pollution: Mythbusting, articles and topic guides.
Setting Expectations on Competence Management
Industry Competence Committee.
New Scottish and Welsh governments
CIOB stresses importance of construction after new parliament elections.
The sad story of Derby Hippodrome
An historic building left to decay.
ECA, JIB and JTL back Fabian Society call to invest in skills for a stronger built environment workforce.
Women's Contributions to the Built Environment.
Calls for the delayed Circular Economy Strategy
Over 50 leading businesses, trade associations and professional bodies, including CIAT, and UKGBC sign open letter.
The future workforce: culture change and skill
Under the spotlight at UK Construction Week London.
A landmark moment for postmodern heritage.
A safe energy transition – ECA launches a new Charter
Practical policy actions to speed up low carbon adoption while maintaining installation safety and competency.
Frank Duffy: Researcher and Practitioner
Reflections on achievements and relevance to the wider research and practice communities.
The 2026 Compliance Landscape: Fire doors
Why 'Business as Usual' is a Liability.
Cutting construction carbon footprint by caring for soil
Is construction neglecting one of the planet’s most powerful carbon stores and one of our greatest natural climate allies.