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    Autumn Budget 2025: Key points for business energy and net zero

    Autumn Budget 2025: Key points for business energy and net zero
    5:07

    The Autumn Budget 2025 followed a week of speculation, including leaked OBR forecasts pointing to weaker productivity and limited fiscal headroom.

     

    With this in mind, many (ourselves included) expected bold action on energy and net zero. The Chancellor’s speech, however, offered very little detail on either with most of the substance sitting quietly in the full Budget document.

    Below, we break down what was announced, what wasn’t, and what it means for your energy and sustainability plans.

     

    Key Takeaways

     

     

    • ECO will end and 75% of the domestic RO cost will move into general taxation, reducing household bills but not affecting business energy costs.
    • There are long-term commitments to nuclear and renewable investment, but no new incentives for business energy efficiency or decarbonisation.
    • Non-commodity cost reform remains limited, with commercial energy users seeing little direct relief.
    • EVs will be taxed from 2028 at 3p per mile (1.5p for hybrids), impacting long-term fleet planning.
    • No major updates were made on grid reform, SME support, or corporate net-zero reporting.

     

     

    Ending the Energy Company Obligation (ECO) and Renewables Obligation (RO) changes

     

    What’s been announced:

    The government will end the Energy Company Obligation and will move 75% of the domestic Renewables Obligation cost into general taxation for three years. Together, these changes are designed to remove around £150 a year from the average household energy bill from April 2026. 

     

    Why this is happening:

    The aim is to lower domestic electricity bills by lifting some of the legacy policy costs that households currently pay through their tariffs.

     

    Impact on businesses:

     

    • ECO removal has no relevance for businesses as it was a domestic-only scheme
    • Business Renewables Obligation costs remain unchanged, although RO is already a diminishing levy
    • Domestic savings do not flow through to commercial customers
    • Non-commodity charges for businesses are still expected to rise

     

    What businesses should do now:

     

    • Continue building non-commodity costs into procurement strategies
    • Pursue demand reduction where possible

    • Explore flexibility solutions to reduce exposure to high electricity prices

     

    Capital investment in renewables

     

    What’s been announced:

    The Budget confirmed more than 120 billion pounds of capital investment across UK infrastructure, including continued support for UK renewable generation and nuclear expansion.

     

    Why this is happening:

    The government intends to strengthen energy security and accelerate the shift away from imported fossil fuels.

     

    Impact on businesses:

     

    • Positive long-term signal for the UK’s clean energy mix

    • No new incentives for on-site generation or battery storage

    • No change to payback periods for low-carbon heat or efficiency upgrades

    • Strategic certainty without immediate financial support

     

    What businesses should do now:

     

    • Continue evaluating solar, storage and low carbon heat based on commercial returns
    • Build long-term net zero strategies around expected grid mix changes
    • Use stability in policy direction to plan multi-year investments

     

     

    EV charging and road pricing

     

    What’s been announced:

    From 2028, electric vehicles will be taxed at 3 pence per mile, with hybrid vehicles taxed at 1.5 pence per mile

     

    Why is this happening:
    Fuel duty income is falling as drivers switch to lower emission vehicles, so the government is introducing a replacement system to secure long-term revenue.

     

    Impact on businesses:

     

    • Clearer long-term total cost of ownership modelling for fleets
    • Better visibility for lease planning and vehicle replacement cycles
    • No impact on near-term EV benefits or incentives
    • Greater certainty for budgeting and infrastructure decisions

     

    What businesses should do now:

     

    • Revisit fleet decarbonisation plans
    • Assess public vs on-site charging strategies
    • Model long-term EV operating costs

     

    What wasn’t mentioned in the Autumn Budget 2025?

     

    While the Autumn Budget touched on several key areas for UK businesses, there were also some notable gaps. There were no updates on SME energy efficiency support, no progress on grid connection reform, no new incentives for low carbon heat and no changes to corporate sustainability reporting. These omissions matter because they shape the long-term landscape for investment, net zero planning and operational costs.

     

    Gaps like these can delay investment decisions or make long-term planning harder, but they also highlight the importance of building strategies that focus on efficiency, resilience and smarter energy use, so your business is prepared even when government policy is uncertain.

     

    Ready to understand what the Autumn Budget means for your business? We’re here to help you cut costs, reduce carbon and plan with confidence. Speak to our team today and take the next step towards a credible, actionable and future-proof energy strategy.