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Autumn statement Review 2023


Envantage’s Trading and Risk Manager, Richard King, summarises the key takeaways from the Autumn Statement announced on November 22nd.

Chancellor Jeremy Hunt delivered his first Autumn Statement on 22nd November which laid out the government’s taxation and spending plans for the next 12 months. While the reduction in workers’ National Insurance contributions gained most headlines in the press, the Chancellor’s 110 measures to strengthen the UK economy included several initiatives. Among them were specific measures aimed at supporting the energy industry and accelerating the low-carbon transition. These initiatives are part of the £4.5 billion allocated to strategic manufacturing sectors—such as automotive, aerospace, life sciences, and clean energy—from 2025 for a five-year period.

The most eye-catching announcement was the confirmation of the widely anticipated decision to make “full expensing” for capital investment permanent for businesses. This will reduce firms’ cost of capital for qualifying plant and machinery investment which will prove to be a big benefit for companies which invest heavily in such equipment, such as manufacturers, but will also help incentivise companies to deploy renewable and clean technologies to help them decarbonise.

The chancellor also confirmed plans to accelerate the time it takes for clean energy businesses to access the electricity network by accepting the recommendations of the Winser Review published this summer. The aim will be to half the time it takes to build new transmission lines from fourteen years to seven, and by cutting the average waiting time for new energy projects to connect to the grid from five years to six months. The proposals also recommend offering up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure as part of a massive expansion of the electricity grid. The acceptance of these reforms is seen as vital if the UK is to meet its aim of decarbonising the UK power system by 2035.

Further measures announced yesterday include:

  • A freeze to the main and reduced rates of Climate Change Levy in the UK in 2025-26 at the main rate of £0.00775/kWh for electricity and gas, £0.02175/kWh for liquid petroleum gas (LPG), and £0.06064/kWh for any other taxable commodity. Reduced rates will be frozen at 92% for electricity, 77% for LPG, and 89% for gas and any other taxable commodity.
  • Maintaining the Carbon Price Support (CPS) rates in Great Britain at a level equivalent to £18/t CO2 in 2025-26.
  • Reforms to the UK Emissions Trading Scheme which will reduce the number of ETS permits available for purchase from government by 45% between 2023 and 2027 and extend the scheme to cover emissions from domestic maritime and energy from waste in 2026 and 2028 respectively. The government will also publish the results of its recent consultation on strategies to mitigate carbon leakage risk including the introduction of a carbon border adjustment mechanism.
  • The introduction of a new, six-year Climate Change Agreement scheme that will entitle participants that meet agreed energy efficiency or decarbonisation targets between 2025 and 2030 to reduced rates of Climate Change Levy from 1 July 2027 to 31 March 2033. The new scheme will be open to applications for new sectors that meet energy intensity and import penetration criteria and will require more regular reporting of energy and throughput data.
  • Support to help firms transition to a resilient, low-carbon and industrially competitive future and invest in more energy efficient and low-carbon technologies through the £185m Industrial Energy Transformation Fund (IETF).
  • Expansion of VAT relief available on the installation of energy-saving materials in residential buildings or those used solely for a relevant charitable purpose.
  • Confirmation the Energy Profits Levy will end no later than 31 March 2028.
  • Support for investments in manufacturing capacity through a £960 million Green Industries Growth Accelerator (GIGA) to boost those clean energy sectors where the UK has a competitive advantage such as Carbon Capture Utilisation and Storage (CCUS), hydrogen, offshore wind, electricity networks, and nuclear.

As to be expected, the reaction from industrial leaders was mixed with broad support for the full expensing for capital investment, acceptance of the Winser Review’s recommendations to improve grid connections and the Green Industries Growth Accelerator. Criticism came of the additional funding for green measures, that it was limited compared to the state aid packages recently announced by the USA and the EU. There was also little mention of measures to improve energy efficiency and insulation, despite the fact that energy efficiency is seen as one of the quickest and cost-effective means to reduce carbon emissions.

Envantage continues to monitor news that may impact industry operations and ensures to issue updates on any emerging opportunities or obligations which may arise from the Autumn Statement. Envantage recognises the importance of understanding and navigating these changes and can provide the support and clarity that you and your business need. Contact us on 0161 4487722 or email to speak to one of our Energy and Carbon experts.




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