Autumn Budget 2025: What the energy measures mean for Net Zero 

Every Autumn Budget gives us clues about where the UK is heading, not just economically, but socially and environmentally too. And this year’s energy-related announcements offer a mix of welcome relief, structural change, and some important questions about how we stay on track for Net Zero. 

Below is our take on what matters, what’s shifting, and what this could mean for businesses, the wider energy system, and households. 

Support for energy-intensive industries 

The Government recommitted to the British Industrial Competitiveness Scheme (BICS), due to take effect from 2027. 

If the final design mirrors the early outline, BICS could provide: 

• Partial or full exemptions from certain energy levies 

• Significant reductions in electricity costs for qualifying industries 

• A more stable footing for UK manufacturing and other heavy users 

For sectors where energy is a major operating cost, this could be transformational. 

From a Net Zero perspective, lower operating costs may also free up headroom for investment in cleaner processes, electrification, and innovative technologies – all crucial parts of industrial decarbonisation. 

That said, the details are still in consultation, so that the actual impact will depend heavily on the final eligibility criteria and relief structure. 

Continued investment in clean energy infrastructure  

Alongside cost changes, the Budget reaffirmed support for national clean energy infrastructure, including ongoing investment through Great British Energy. 

This signals that, even in a tight fiscal environment, the UK sees renewable generation and low-carbon infrastructure as core to: 

• Future energy security 

• National competitiveness 

• Long-term price resilience 

• Progress toward Net Zero 

More clean energy capacity should, over time, reduce the UK’s exposure to global fossil fuel price volatility and support the broader transition toward lower-carbon power. This long-term direction matters. It gives organisations and households alike a clearer view of where the energy system is heading. 

A rethink of how households pay for clean energy 

One of the biggest changes is the decision to remove a large portion of green levies. This includes 75% of the Renewables Obligation (RO) from domestic electricity bills from April 2026, funding them through general taxation instead. 

On the surface, the outcome is positive for households: 

• Bills are expected to fall around £150 a year for a typical home. 

• The immediate link between supporting renewables and rising household bills weakens. 

• Tariffs may become simpler and more predictable. 

This is a real shift in how the UK wants households to experience the energy transition, and for many families, that relief will be welcome. But there’s a deeper layer worth considering. 

A meaningful impact on bills… but what about long-term carbon reduction? 

The Budget also confirmed that the Energy Company Obligation (ECO), the long-running scheme that funded energy-efficiency upgrades for low-income and vulnerable households, will be scrapped. 

Removing ECO contributes to lowering bills today. But ECO wasn’t just a levy – it was one of the UK’s most effective mechanisms for: 

• Tackling fuel poverty 

• Funding insulation and efficiency upgrades 

• Reducing carbon emissions 

• Permanently lowering energy use in the least efficient homes 

So, while the budget offers short-term financial relief, it leaves a question hanging over the long-term approach: 

How will the UK continue to support energy efficiency at scale if one of its core programmes disappears? 

Energy efficiency is essential for Net Zero – not an optional extra. Reducing energy demand is one of the most powerful ways to cut emissions and bills in a lasting way. This is an area many across the sector will be watching closely for a replacement or alternative pathway 

A transition moving forward  

The Budget makes progress on affordability and industrial competitiveness, but it also raises important questions, especially around sustainability. 

Some of the areas still to watch include: 

• What happens to large-scale home energy-efficiency efforts now that ECO is ending? 

• Will a replacement scheme be introduced, and when? 

• How will changes in domestic costs influence customer behaviour and expectations? 

• What will BICS look like in practice once consultations close? 

• How quickly can new clean-energy projects come online? 

These aren’t criticisms, they’re simply the realities of a complex transition. 

Meeting Net Zero while keeping energy affordable is a balance the UK must keep navigating carefully. 

Our final thoughts? 

This year’s Autumn Budget represents a meaningful moment for the UK’s energy landscape: 

• Households should see welcome cost relief. 

• Energy-intensive industries could gain new competitiveness tools. 

• The long-term commitment to clean energy remains intact. 

• But the removal of ECO highlights a gap that will need attention if the UK is to continue reducing emissions and supporting vulnerable households. 

Ultimately, the Budget nudges the transition forward, but it also reminds us that affordability and sustainability must go hand in hand if the UK is to reach Net Zero fairly. 

If you’d like to dig deeper into what these changes could mean for your organisation or your long-term energy strategy, please get in touch, and we’d be happy to discuss.