UK firms making 'carbon-saving' products need support – CIA

18 May 2011 15:45  [Source: ICIS news]

LONDON (ICIS)--UK industries making “carbon-saving” products will be wiped out unless effective transitional support measures are put in place by government as the country is moved towards a low-carbon economy, the Chemical Industries Association (CIA) said on Wednesday.

“Britain’s £60bn ($97bn, €68bn) chemical industry faces a new competitive challenge,” the CIA, which represents chemical and pharmaceutical businesses throughout the UK, said in a statement.

“Boss of the association Steve Elliott has warned that unless they are effective the cumulative policy impact on energy-related costs (already the highest in Europe) lifts from 10% to over 100% of profits – turning successful companies making green products to loss-making concerns,” it added.

Energy-intensive companies operating in the UK such as INEOS and Tata Steel object to the UK’s proposed "carbon floor" tax, a newspaper report suggested at the weekend.

The UK government on Tuesday proposed a 50% cut in carbon emissions for Britain between 2023 and 2027 from 1990 levels. The proposals put the UK on a course to cut emissions by at least 80% by 2050, it said.

Prime Minister David Cameron said: “The transition to a low-carbon economy is necessary, real, and global. By stepping up, showing leadership and competing with the world, the UK can prove that there need not be a tension between green and growth.”

The Department of Energy and Climate Change said: “The carbon budget will place the British economy at the leading edge of a new global industrial transformation, and ensure low-carbon energy security and decarbonisation is achieved at least cost to the consumer.”

The coalition government said that before the end of the year it will announce a package of measures to reduce the impact of its policy on electricity costs for energy-intensive users such as the chemical industry and to help firms adjust to “to the low-carbon industrial transformation”.

Elliott is chairman of the UK’s Energy Intensive Users Group, which campaigns for secure industrial energy supplies at internationally competitive prices.

($1 = £0.62, €1 = £0.88)

By: Nigel Davis
+44 20 8652 3214

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