The Government has confirmed that Carbon Price Support (CPS) will be removed from April 2028. CPS is a tax on fossil fuels used in electricity generation, introduced in 2013 to strengthen the carbon price above the level provided by the UK Emissions Trading Scheme (ETS).

In today’s statement, the Exchequer Secretary to the Treasury said that CPS has “done its job”, with coal largely driven off the grid and the ETS now operating with a tighter cap to support continued decarbonisation. The Government says the removal of CPS will simplify the UK’s carbon pricing system and help offset costs associated with the British Industrial Competitiveness Scheme (BICS), which will reduce electricity bills for manufacturing sectors.

For the UK chemical industry, electricity costs remain one of the most significant barriers to competitiveness, investment and long‑term resilience. The removal of CPS from 2028 provides some future relief, but many energy‑intensive businesses continue to face high and volatile electricity prices compared to international competitors.

Steve Elliott, Chief Executive of the Chemical Industries Association, said:

“The removal of Carbon Price Support is welcome but is only from 2028, and there is a concern that increasing network costs will outstrip the benefits of this reduction.”

The Chemical Industries Association will continue to work with Government to ensure that the UK’s energy‑intensive industries have the competitive conditions needed to invest, grow and contribute to a resilient, modern industrial economy.

The Government has confirmed that Carbon Price Support (CPS) will be removed from April 2028. CPS is a tax on fossil fuels used in electricity generation, introduced in 2013 to strengthen the carbon price above the level provided by the UK Emissions Trading Scheme (ETS).
In yesterday’s statement, the Exchequer Secretary to the Treasury said that CPS has “done its job”, with coal largely driven off the grid and the ETS now operating with a tighter cap to support continued decarbonisation. The Government says the removal of CPS will simplify the UK’s carbon pricing system and help offset costs associated with the British Industrial Competitiveness Scheme (BICS), which will reduce electricity bills for manufacturing sectors.
For the UK chemical industry, electricity costs remain one of the most significant barriers to competitiveness, investment and long‑term resilience. The removal of CPS from 2028 provides some future relief, but many energy‑intensive businesses continue to face high and volatile electricity prices compared to international competitors.
Our Chief Executive Steve Elliott said: “The removal of Carbon Price Support is welcome but is only from 2028, and there is a concern that increasing network costs will outstrip the benefits of this reduction.”
The Chemical Industries Association will continue to work with Government to ensure that the UK’s energy‑intensive industries have the competitive conditions needed to invest, grow and contribute to a resilient, modern industrial economy.

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