The Chancellor has just shared the Spring Statement for 2025, highlighting measures to boost the UK’s economy, strengthen industrial competitiveness, and encourage long-term investment. Some of the key points are particularly important for the aluminium industry, covering areas like energy, trade, manufacturing, and sustainability.
Climate Change Levy Exemption for Hydrogen Electrolysis
The government has announced it will exempt electricity used in hydrogen production through electrolysis from the Climate Change Levy (CCL). This move is aimed at supporting the development of low-carbon hydrogen, which is key to decarbonising heavy industries and energy systems.
While this measure isn't focused on aluminium directly, it reflects a wider commitment to easing energy cost pressures for energy-intensive industries.
Expansion of the National Wealth Fund
The National Wealth Fund’s economic capital limit will be raised from £4.5 billion to £7 billion, with the goal of attracting over £70 billion in private sector investment. The fund will focus on clean energy, advanced manufacturing, and infrastructure projects that support net zero goals.
This expansion creates new opportunities for the aluminium sector, especially for companies looking to expand domestic recycling, circular economy infrastructure, or invest in more sustainable manufacturing practices. The fund builds on earlier commitments to support green steel and hydrogen initiatives.
Defence Innovation and Industrial Growth
The Budget introduces new funding for defence innovation and the creation of a national defence innovation body. The government aims to accelerate the development of advanced military technology and boost the UK's defence manufacturing capacity.
Given aluminium's key role in defence applications, from lightweight structures to high-performance alloys, this initiative could open long-term growth opportunities for manufacturers and processors involved in defence supply chains.
Economic Outlook and Business Environment
The Office for Budget Responsibility (OBR) predicts GDP growth of 0.8% in 2024, increasing to 1.9% in 2025 and 2.0% in 2026. Inflation is expected to hit the 2% target by the second half of 2025.
These forecasts point to a more stable business environment for UK manufacturers, supported by falling energy costs and stronger export confidence. However, global risks still persist, including recent changes in US tariffs and the introduction of CBAM.
