As we move through summer 2025, UK energy markets are once again feeling the weight of global pressure. From geopolitical conflict and supply chain disruption to policy reform and carbon pricing, businesses in the process industries are facing another challenging season of volatility.
Here are three developments we think NEPIC members should be paying attention to.
Global Instability Is Adding Up
International conflicts are once again reverberating through global energy markets. In the Middle East, tensions around the Strait of Hormuz have already pushed oil and gas prices higher, with further escalation threatening critical shipping routes. In Ukraine, domestic gas output remains under pressure following Russian attacks, driving greater reliance on European imports. These factors are tightening European supply, and potentially increasing costs for industrial gas users.
Storage Improves, But Risks Remain
While Europe’s storage levels are tracking ahead of schedule for winter, market fragility remains. The UK is still exposed to disruptions in Norwegian flows, LNG diversions during Asian heatwaves, and unplanned outages. If any of these risks materialise, short-term prices could rise sharply, making flexible procurement strategies vital for industrial buyers.
Carbon Prices and Policy Are in Focus
With the UK now formally linking its Emissions Trading Scheme with the EU’s, carbon prices have remained strong. Reforms like the Market Stability Reserve and reduced free allowances in aviation are tightening supply, a trend that’s already drawing increased attention from institutional investors. For energy-intensive manufacturers and exporters operating under Scope 1 emissions, this could signal rising compliance costs.
On the policy front, the UK government’s decision to retain a single national price under the REMA programme offers some stability, but with wider reforms due by 2029, change is still on the horizon.
What This Means for NEPIC Members
Whether you’re managing procurement, planning CapEx, or working on decarbonisation pathways, now’s the time to review your risk strategy. Forward markets remain responsive to global headlines, and in volatile conditions, proactive planning is key.
If you’d like a deeper dive into this summer’s trends, including weather forecasts, tariff policy, and contract guidance, Trident have shared a full breakdown in their latest Summer Energy Market Update.
