UK energy intensive industries (EIIs) will be compensated for the policy costs of the renewable obligation and feed-in tariffs after confirmation of state aid clearance from the EU competition commissioner to the business department (BIS).
Business secretary Sajid Javid had been lobbying the EU over the issue in order to protect EIIs, and in particular steel, from energy costs he claimed were worth hundreds of millions of pounds.
The government is due to publish guidance this month on which sectors will qualify for compensation. Payments will be backdated to 14 December, when the state aid clearance was confirmed.
In the autumn statement, chancellor George Osborne announced that EIIs would eventually become exempt from the costs instead of merely compensated for them. Under the new arrangement, the cost of the scheme will move from the exchequer to all other energy users.