{"id":1902,"date":"2022-09-06T13:21:01","date_gmt":"2022-09-06T11:21:01","guid":{"rendered":""},"modified":"2026-07-26T16:23:51","modified_gmt":"2026-07-26T14:23:51","slug":"eii-explained-everything-you-need-to-know","status":"publish","type":"article","link":"https:\/\/leyton.majjane.agency\/uk\/insights\/articles\/eii-explained-everything-you-need-to-know\/","title":{"rendered":"EII Explained: Everything You Need To Know About The Energy Intensive Industries (EII) exemption scheme"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1902\" class=\"elementor elementor-1902\" data-elementor-post-type=\"article\">\n\t\t\t\t<div class=\"elementor-element elementor-element-182cfbee e-flex e-con-boxed e-con e-parent\" data-id=\"182cfbee\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-20895491 elementor-widget elementor-widget-text-editor\" data-id=\"20895491\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t\n<p class=\"wp-block-paragraph\">Applying for an EII certificate through the EII exemption scheme will mitigate the rising cost of energy bills for industries that are high energy users. This article provides EII scheme guidance by answering frequently asked questions about the\u00a0<a href=\"https:\/\/leyton.com\/uk\/energy-tax-exemption-energy-intensive-industries-eii\/\">Energy Intensive industries (EII) exemption scheme<\/a>\u00a0to help businesses understand if it\u2019s the right\u00a0<a href=\"https:\/\/leyton.com\/uk\/energy-tax-relief\/\">energy tax relief<\/a>\u00a0scheme for them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What does EII mean? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">EII stands for\u00a0<a href=\"https:\/\/leyton.com\/uk\/energy-tax-exemption-energy-intensive-industries-eii\/\">Energy Intensive Industries<\/a>. The\u00a0<a href=\"https:\/\/commonslibrary.parliament.uk\/research-briefings\/cdp-2021-0195\/\">UK Government<\/a>\u00a0defines Energy Intensive Industries as \u201cindustrial sectors \u2013 usually manufacturing industries \u2013 that are high users of energy\u201d. Energy Intensive Industries have a high proportion of fuel energy costs over other costs such as labour, as part of their overall production costs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is the Energy Intensive Industries (EII) exemption scheme?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The UK Government supports high energy usage business with their electricity costs through the Energy Intensive Industries (EII) exemption scheme. The scheme is a form of\u00a0<a href=\"https:\/\/leyton.com\/uk\/energy-tax-relief\/\">energy tax relief<\/a>\u00a0that allows eligible companies to reduce their energy bills through an exemption on taxes that fund low-carbon and\u00a0renewable\u00a0support schemes. Energy Intensive Industries tend to be manufacturers such as steel and chemical producers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why was the Energy Intensive Industries (EII) scheme created? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses\u2019 electricity bills include a series of taxes that fund renewable energy schemes, which help pay for the UK Government\u2019s Net Zero Strategy for decarbonising the UK economy by 2050. These renewable energy schemes fund renewable energy generation (solar, wind, hydro and nuclear power). There are four different schemes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Contracts for Difference (CfD)<\/li>\n\n\n\n<li>Renewables Obligation (RO)<\/li>\n\n\n\n<li>Small-scale Feed-in Tariffs (FIT)<\/li>\n\n\n\n<li>GB Capacity Market (CM)<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These taxes put UK businesses at a competitive disadvantage internationally, so there is therefore a risk that these firms could move production abroad to countries with lower emission curbs. This is known as \u2018carbon leakage\u2019 and would defeat the point of trying to cut global greenhouse gas emissions. To lower the risk of carbon leakage, the UK Government created the Energy Intensive Industries (EII) exemption in 2016. The EII scheme mitigates the impact of renewables policies allowing businesses to stay competitive internationally.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is the Energy Intensive Industries (EII) exemption scheme a compensation scheme?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The EII scheme is not technically a compensation scheme. Instead, it reduces renewable energy (electricity) related taxes by exempting eligible companies from having to pay by providing them with an exemption certificate. There is a separate UK Emissions Trading Scheme (UK ETS) that acts as a compensation scheme where you receive compensation payments periodically.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As well as this, businesses holding a valid EII certificate are now also eligible for the Network Compensation (NCC) Scheme, which gives compensation on eligible network charging costs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is an EII certificate?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The UK Government offers relief for Energy Intensive Industries in the form of an EII certificate, exempting them from the indirect costs of renewable energy taxation schemes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Qualifying businesses receive an EII certificate, which confirms that they are eligible for Contracts for Difference (CfD), Renewables Obligation (RO), small-scale Feed-in Tariffs (FIT), and GB Capacity Market (CM) exemption. To receive the exemptions businesses must pass the EII certificate to their electricity provider.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the eligibility requirements for the EII scheme? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The UK Government guidance lists two tests for determining whether a business is eligible for an EII certificate. These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The sector level test:<\/strong> The business must manufacture a product in the UK within an eligible sector that has a specific 4-digit\u00a0NACE\u00a0code (see the below section on qualifying sectors)<\/li>\n\n\n\n<li><strong>The business level test:<\/strong> The business must pass a 20% electricity intensity test<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Beyond these tests, businesses must also:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>not be an Ailing or Insolvent Economic Actor (AIEA)<\/li>\n\n\n\n<li>have at least one quarter of financial data<\/li>\n\n\n\n<li>have at least three months\u2019 worth of evidence of the proportion of electricity used to manufacture their product<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What sectors qualify for the Energy Intensive Industries (EII) scheme? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Most of the qualifying Energy Intensive Industries are from manufacturing industries, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Wood<\/li>\n\n\n\n<li>Paper<\/li>\n\n\n\n<li>Rubber<\/li>\n\n\n\n<li>Glass<\/li>\n\n\n\n<li>Plastics<\/li>\n\n\n\n<li>Metal production<\/li>\n\n\n\n<li>Metal casting and processing<\/li>\n\n\n\n<li>Battery production<\/li>\n\n\n\n<li>Malts<\/li>\n\n\n\n<li>Grain milling<\/li>\n\n\n\n<li>Chemical production<\/li>\n\n\n\n<li>Fertiliser production<\/li>\n\n\n\n<li>Ceramics<\/li>\n\n\n\n<li>Cement<\/li>\n\n\n\n<li>Refactory products<\/li>\n\n\n\n<li>Animal feed<\/li>\n\n\n\n<li>Poultry processing<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The full list of sectors that qualify for the \u2018sector level test\u2019, along with their 4-digit\u00a0NACE\u00a0codes\u00a0(which are needed for the sector level test) are listed within the UK Government\u2019s <a href=\"https:\/\/assets.publishing.service.gov.uk\/government\/uploads\/system\/uploads\/attachment_data\/file\/1094666\/cfd-ro-fit--exemption-guidance-revised-july-2022.pdf\">EII guidance for applicants<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How long is an EII certificate valid for?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">EII certificates are valid for one year. Businesses must reapply for a certificate on a yearly basis, applying for a new one before their current certificate expires.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How much will my business receive through the EII exemption scheme?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The amount your business can save varies depending on your specific circumstances. You can find out how much you can claim by <a href=\"https:\/\/leyton.com\/uk\/contact-us\/\">speaking to one of our energy tax experts<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How long will the UK Government run the EII exemption scheme? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The UK Government keeps extending the length of the EII exemption scheme. While the scheme is under an ongoing review, it\u2019s still active for 2026. <a href=\"https:\/\/assets.publishing.service.gov.uk\/media\/69fc5886cd2e0e8b5b20b21e\/energy-intensive-industries-certificate-for-exemption-funding-contracts-for-difference-renewables-obligation-feed-in-tariff.pdf\">Revised guidance for applicants<\/a> was published in May 2026.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Are there any examples of successful EII exemption scheme applicants?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">You can read our case studies for examples of how we\u2019ve helped businesses successfully receive financial relief through the <a href=\"https:\/\/leyton.com\/uk\/energy-tax-exemption-energy-intensive-industries-eii\/\">Energy Intensive Industries (EII) exemption scheme<\/a>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/leyton.com\/uk\/insights\/case-study\/food-packaging-manufacturing-client-eii\/\">Food Packaging Manufacturing<\/a> were surprised by how much they saved, as the benefit wasn\u2019t well known within their industry.<\/li>\n\n\n\n<li><a href=\"https:\/\/leyton.com\/uk\/insights\/case-study\/energy-tax-exemptions-with-boal-extrusion-uk-and-alfed\/\">BOAL Extrusion UK and ALFED<\/a> received huge savings estimated at \u00a3250,000 per year.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Is the EII exemption scheme the right energy tax relief scheme for my business? <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Energy Intensive Industries (EII) exemption scheme is one of several energy tax relief schemes offered by the UK Government. To find out more how your business can make savings and efficiencies, you can read our help\u00a0blog: <a href=\"https:\/\/leyton.com\/uk\/insights\/articles\/leyton-help-reduce-business-energy-costs\/\">Our energy advice for businesses during times of market volatility<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How can my business apply for EII exemption?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Our <a href=\"https:\/\/leyton.com\/uk\/energy-tax-relief\/\">Energy Team<\/a> has a wealth of experience in successfully helping eligible businesses unlock the maximum amount of relief, compensation or savings that they can receive \u2013 which can lead to a significant portion of energy costs! We offer an end-to-end service: we\u2019ll put together your entire claim, handle all the administration and submit your completed application to the government. It\u2019s a simple process that only takes us a matter of days. Keen to find out more? <a href=\"https:\/\/leyton.com\/uk\/contact-us\/\">Speak to our team<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Applying for an EII certificate through the EII exemption scheme will mitigate the rising cost of energy bills for industries that are high energy users. This article provides EII scheme guidance by answering frequently asked questions about the\u00a0Energy Intensive industries (EII) exemption scheme\u00a0to help businesses understand if it\u2019s the right\u00a0energy tax relief\u00a0scheme for them. What [&hellip;]<\/p>\n","protected":false},"author":42,"featured_media":1979,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[115,116,117,122,127,133],"tags":[],"expertise":[],"class_list":["post-1902","article","type-article","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","category-energy-tax-relief","category-engineering","category-food-and-beverage","category-innovation","category-manufacturing"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.1 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The Energy Intensive Industries (EII) exemption scheme explained<\/title>\n<meta name=\"description\" content=\"Our guide answers FAQs on how the EII exemption scheme gives Energy Intensive Industries tax relief on their energy bills.\" \/>\n<meta name=\"robots\" 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