Michael Fallon

The UK government has published a new guidance on how energy intensive businesses can apply for a share of £250m of compensation to offset the cost of energy policy in their electricity bills.

The Department for Business Innovation and Skills said on Monday that businesses can apply for financial support from 3 June.

Up to £113m of financial support will be made available through the first tranche of the scheme, which has been designed to help companies deal with indirect costs associated with the EU Emissions Trading System.

UK Business and Energy Minister Michael Fallon said that energy intensive industries are a vital part of the UK economy.

"It is essential that as we put in place policies to generate the necessary investment in energy infrastructure we do not undermine the competitiveness of UK industry," Fallon added.

"This compensation package will support firms, protect jobs and help reduce the risk of industries leaving our shores."

The government said it will also establish a compensation scheme to address the indirect costs of the Carbon Price Support mechanism, subject to state aid clearance.

Image: UK Business and Energy Minister Michael Fallon. Photo: Courtesy of the UK government.