High energy costs driven by green levies have left the UK economy £30billion smaller than it otherwise would have been, according to new analysis from EY.
The report found sectors including steel, cement, glass and ceramics shrank by 8% between 2019 and 2024, while the rest of the economy grew by more than 6% over the same period.
EY said if energy-intensive industries had expanded at the same rate as the wider economy, UK GDP would now be £30bn larger.
Peter Arnold, chief UK economist at EY, blamed mounting policy costs linked to the energy transition.
He said: “Policy costs to support new renewables, new nuclear, and capacity to meet peak demand, as well as the cost of an expanding power grid” had pushed UK electricity prices significantly above those in other European countries.
The findings add to growing pressure on ministers to reduce energy costs for businesses, with industry leaders warning high electricity prices are damaging competitiveness and investment.
The UK Government recently announced plans to waive some green levies for around 10,000 businesses from 2027 under its British Industrial Competitiveness Scheme, although many firms argue support is needed sooner and on a larger scale.