Osborne, who was addressing parliament with his Autumn Statement today, said: "We're going to permanently exempt our energy intensive industries ... from the cost of environmental tariffs, so we keep their bills down, keep them competitive and keep them here."
A crisis has engulfed the UK steel industry due to problems caused by cheap steel from China, rising energy costs, and a strong pound. This has led to closures and thousands of job losses from firms such as Tata Steel, SSI steelworks and Caparo.
Today's announcement means energy intensive industries such as steel and chemicals will be permanently excluded from extra costs related to the renewables obligation and feed-in tariffs, which is used to fund green projects like solar plants.
The move will add £5 per year to consumer energy bills but reduced energy efficiency charges on suppliers as well as cuts to green energy subsidies which will lower them by about £30 a year in 2017-18.