The government must take action to prevent the UK paper industry moving abroad, according to the Confederation of Paper Industries (CPI).
In a letter to chancellor George Osborne ahead of next month’s autumn statement, CPI director general David Workman (left) said he was concerned that current energy, carbon and environmental policies could damage energy intensive industries, known as ‘EIIs’.
He said that carbon accounting policies merely shift emissions offshore, “resulting in no reduction in global emissions”.
“Of course alongside the emissions being offshored, so also are the jobs and wealth creation that we should be benefitting from as we seek to re-balance the economy”, he added.
The CPI said the £250m announced at the 2011 autumn statement to support EIIs, was a “mere drop in the ocean of what is needed to offset the cumulative cost impact of current Government policy”.
Workman called on the Osborne to:
- Support a major industrial energy efficiency programme by allocating a substantial amount of the money raised from industry in Emissions Trading Scheme (ETS) and Carbon Price Floor (CPF) taxation for this purpose.
- Rethink the CPF cost escalator – an increase in electricity related carbon costs from effectively zero in 2012 to £33 (per tonne carbon dioxide) in 2020 is simply competitively unsustainable. Ideally, we would seek to abandon the CPF altogether.
- Reward and support investment in on-site electricity generation for self-use by exempting it from taxation – present policies are destroying the economic case to invest.
- Support the further deployment (and retention of existing plant) of more efficient Combined Heat and Power (CHP) generation through feed-in tariffs or other support mechanisms.
- Accept that for energy security a mix of generation technologies is required and that gas will have a major role to play through to at least the 2030s.
Osborne will deliver his autumn statement on 5 December.
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