Autumn Budget 2025: What It Means for Energy, Decarbonisation, and UK Businesses…

Chancellor Rachel Reeves delivered the Autumn Budget on 26 November 2025, and there were several announcements with real implications for energy costs and the decarbonisation pathway. Here are the key takeaways we’re watching.

1) Business energy bills and industrial support

• The Budget restated the uplift in relief through the Network Charging Compensation Scheme, increasing support from 60% to 90%.
• Eligibility for the British Industrial Competitiveness Scheme is under consultation. If implemented as proposed, it could cut eligible manufacturing bills by around £35–£40/MWh, via exemptions tied to RO, FiTs, and Capacity Market indirect costs.

2) Climate Change Levy (CCL) changes

Following the Spring Statement consultation, the government plans to expand CCL non-fuel use exemptions to include:

• electricity used for hydrogen electrolysis, and
• natural gas used as a CO₂ source in producing sodium bicarbonate. Target timing: Spring 2026, subject to parliamentary approval.

3) Domestic policy that may affect suppliers and markets

• Government will fund 75% of Renewables Obligation costs for households across 2026–27 to 2028–29.
• Funding for the Energy Company Obligation won’t continue on bills after March 2026; a new £1.5bn fuel poverty package is expected.

4) Energy industry signals

• The temporary Energy Profits Levy will be replaced by a permanent Oil & Gas Profits Mechanism, activating only in high-price periods. The mechanism is set at 35%, with price thresholds of $90/bbl oil and 90p/therm gas.
• Wylfa (Anglesey) confirmed as host for the UK’s first small modular reactor project.
• The Green Financing Framework now includes nuclear energy, enabling green gilts/Green Savings Bonds funding.
• Carbon Price Support frozen at a level equivalent to £18/tCO₂ for 2027–28.
• Government also released the North Sea Future Plan alongside the Budget.

5) Decarbonisation and trade

• UK CBAM will be legislated in Finance Bill 2025–26 and launches 1 Jan 2027. Indirect emissions are delayed until 2029 at the earliest.
• Treasury will consider private finance routes (including PPPs) for decarbonising public-sector estates where value-for-money cases are strong.

6) Transport and EV costs

• The 5p fuel duty cut is extended for five more months, then reversed in stages through Sept 2026 – Mar 2027, with RPI uprating from April 2027.
• A new mileage charge for EVs and PHEVs begins April 2028, with consultation open until 18 March 2026.
• A review of public EV charging costs starts Q1 2026, reporting by Q3 2026.

What happens next?

Several measures are still in consultation or need secondary legislation. We’ll keep tracking the policy papers and market response as details land.

If you want to sense-check what these announcements mean for your portfolio—cost exposure, compliance timelines, or net-zero planning—contact us at hello@gleg.co.uk.