The government hopes that allowing providers to charge more will give them greater confidence to invest in building a renewable infrastructure as the UK moves towards a low-carbon economy.
While energy-intensive industries such as steel and cement would be exempt from the increases to maintain their competitiveness, the food and drink industry would not.
Forced to relocate abroad
The FDF warned that, without an exemption, firms may be forced to relocate abroad.
Andrew Kuyk, director of sustainability at the FDF, supported the decision to reward low-carbon energy providers, but felt the government was going too far, too fast. He said the exemption regime should be extended to food and drink firms to recognise the sector's importance to the UK economy.
"Energy costs are increasingly significant," said Kuyk. "Previous uncertainty over future policy was also affecting our competitiveness by acting as a disincentive to investment decisions vital to help us achieve our ambitions for sustainable growth and improved export performance."
Rising costs
Kuyk said the industry already faced rising commodity costs.
"Rising [energy] prices could result in a loss of manufacturing capacity," Kuyk warned. "We will lose production, we will lose exports, we will lose employment, we will lose Britain as a manufacturing base, and we will lose our high standards."
