Exempt major energy users from Carbon tax

Energy intensive manufacturers should be exempt from the Carbon tax says the CBI otherwise we risk making the UK uncompetitive. In a new report published today, it said the Government […]

Register now!

By Sumit Bose

Energy intensive manufacturers should be exempt from the Carbon tax says the CBI otherwise we risk making the UK uncompetitive. In a new report published today, it said the Government had to ensure energy-intensive manufacturers are not undermined by rising costs and climate change energy policies.

The report entitled Protecting the UK’s Foundations: a blueprint for energy-intensive industries, argues that these companies form a crucial part of the manufacturing and supply chain as well as employing a quarter of a million people and accounting for £15bn of UK GDP. As such they need protecting from laws like the Carbon floor price which would penalise many of them in their manufacturing processes.

Katja Hall, CBI Chief Policy Director, said: “Energy intensive industries underpin the UK’s manufacturing sector, making products as diverse as the steel and chemicals needed for wind turbines and low-rolling resistance tyres.

“Businesses accept that they must share the cost of moving to a low-carbon economy, but we simply cannot afford to price out this vital sector. The Government must ensure its autumn energy strategy looks at ways of exempting companies most at risk from the carbon floor price, while encouraging them to be as energy efficient as possible and use new technology to reduce emissions further.”

The report warns that unless there is some protection many of these companies, which are multinational, will relocate away from the UK. The CBI says they must also be given support to adopt renewable technologies like carbon capture and storage and using combined heat and power.