Businesses need greater backing to switch to clean energy and boost efficiency, or risk losing out on growth and competitiveness, a new Energy UK review warns.
The report—backed by major industry groups including the CBI, UK Steel, Make UK and the Food and Drink Federation—highlights key barriers holding businesses back from decarbonising.
High energy costs top the list, with electricity now five times more expensive than gas, creating a major disincentive for firms looking to electrify operations.
The review stresses that investment in clean energy can slash energy costs and protect businesses from future price shocks.
Some SMEs have cut bills by up to 60% through energy-saving schemes. Yet despite the clear benefits, many companies struggle with poor access to advice, slow grid connections and uncompetitive tax rules.
The Government spent £20bn shielding businesses from soaring energy bills in 2022-23. With public spending under pressure, the report argues that supporting firms to cut energy use and invest in renewables is a smarter, long-term solution.
Stronger carbon pricing and border taxes mean businesses must decarbonise to stay competitive.
The review also urges the UK to link its Emissions Trading System with the EU’s to prevent exporters facing higher costs.
Energy UK is calling for urgent action to remove barriers and unlock investment, warning that without it, businesses risk falling behind in the race to net zero.
Its CEO Dhara Vyas, said: “Businesses are the lifeblood of the economy and key to increasing the country’s growth and prosperity. Companies have always adapted to change and businesses know how they can benefit from investing in cleaner energy and green technologies.
“However, it has also been a challenging few years for many of them, not least from high energy prices, so they need support from Government and polices that incentivise companies to make these changes.”
From the CBI Senior Manager, Jonathan Oxley, added: “Businesses across the UK economy play a key role in both driving growth and achieving net zero. Investing in the UK’s clean energy can not only help businesses to manage their energy costs more effectively but can also enhance energy security and resilience to future price shocks. However, unlocking these opportunities and growing new markets requires targeted policy support to assist businesses in their decarbonisation journey.”