The plastics industry has proposed a big increase in Energy from Waste (EfW) capacity and the modernisation and development of UK nuclear capacity to deal with escalating energy costs.
In a pivotal meeting with the Energy Minister Malcolm Wicks MP, the British Plastics Federation (BPF) discussed the lethal effects on employment and competitiveness of huge rises in energy costs that are being exacerbated by the Climate Change Levy.
Worrying BPF statistics show that 44% of companies are unable to pass increased costs to customers with 54% saying that they have scaled down UK investment plans.
On the issue of supply and demand pressures, the Government seemed pessimistic. While it was acknowledged that the decline in north sea energy supplies has been faster than expected, new energy sources from Norway and Qatar via Milford Haven will not necessarily lead to tumbling prices.
But the minister did say that the secretary would make a decision on planning permission for the Belvedere EfW plant in Kent “quite soon”.
BPF director general Peter Davis remained upbeat however. He said: “On some key matters, the Government is responding to our calls for action.
The minister assured us that he and the EU commissioners are pushing hard for the liberalisation of the European energy markets.
The commission is taking legal action and we welcome the anti-trust raids on European energy markets.
“The minister wants to see small to medium enterprises getting good advice on how to save energy, and pertinently the BPF is running a seminar devoted to practical assistance to processors to address energy issues on May 24 in Telford.”
The cases of a number of companies were brought forward, including recycler Chase Plastics
which faces a 50% increase in energy costs to £150,000 a year. This along with the climate change levy means the operation is struggling to break even.
Plastic Engineering in Leamington also faces a doubling of energy costs to £500,000, which could lead to 10% redundancies.
There is a fear that the uncertainty surrounding supplies for this coming winter and the associated speculation will exacerbate energy cost pressures on industry even further.