Climate policies have minimal impact on business energy bills, government advisers find

Policies to reduce CO2 from business and industry have increased bills, but the impact on total costs of production has been limited, according to the body that advises the government on climate change. 

The Committee on Climate Change (CCC) has analysed how the UK’s carbon budgets and related policies have affected energy bills. Its report found that, on average, energy costs in 2016 comprised of 0.9% of operating costs for firms in the commercial sector, 2% for manufacturers and 3.8% for the fifth of the manufacturing sector defined as energy intensive, such as steel, cement and aluminium. 

The costs associated with low carbon policies made up 0.2%, 0.4% and 0.7% of operating costs in these sectors respectively, the committee said. These are estimated to increase to around 0.5%, 1% and 1.6% by 2030. 

Business energy costs - source: The Committee on Climate Change

If all the costs of low carbon policies were passed on to consumers through product prices, a £10 basket of goods and services in 2016 would have cost an extra three pence and be six pence in 2030, the committee said.

However, it pointed out that the analysis did not include benefits from energy efficiency, which would reduce costs on business operations.    Energy use varies significantly across ...

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