The Energy Surcharge mechanism was re-introduced by the glass manufacturers in September 2021 in an effort to offset the cost impact volatile energy markets were having on operational costs. Glass relies mainly on large quantities of natural gas during it’s melting process and it’s this which heavily impacted the production costs.
As a result the glass manufacturers found themselves with no option other than to re-introduce the Energy Surcharge mechanism to recover costs. This results in an additional charge applied to all deliveries based on the weight of the glass.
The cost per kilo is based on a calculation set the previous month and is based on the cost per Therm of natural gas. The average wholesale price of gas is used for the calculation and is taken from the UK National Balancing Point (NBP) market. The Energy Surcharge is designed to follow market prices and pass on minimal impact to downstream users. The set rate for each forward month is generally announced shortly after the 23rd day each month.