Taxes on carbon will make the UK an uncompetitive location for business.

This is the claim of the Energy Intensive Users Group (EIUG), which represents industries that consume large quantities of energy like steel, paper, cement, aluminium and industrial gases.

Last week Chancellor George Osborne announced the introduction of a floor price for carbon in the new Budget.

The EIUG has raised concerns that these plans will see UK energy consumers facing double the carbon costs of their European competitors. The group worries this could add millions to the cost of manufacturing energy intensive products in the UK.

Jeremy Nicholson, EIUG Director said:”The burden of an escalating carbon tax will fall on electricity consumers, making the UK an increasingly unattractive place to site manufacturing businesses. Government must come clean about the impact of the carbon tax on energy intensive industries and see what can be done in the context of the ongoing Electricity Market Reforms to mitigate the cumulative burden of this and other climate policies.”

Energy Secretary Chris Huhne said on Budget day: “There’s a clear, long term signal to energy investors in today’s Budget. A Green Investment Bank with substantially more capital and borrowing capacity and a stronger, more stable carbon price put investment in green energy technologies at the heart of the coalition’s strategy for sustainable, balanced economic growth.”

The Treasury hopes that the carbon price plan will bring stability to energy prices.

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