The House of Commons Energy and Climate Change Committee have published the finding of its inquiry into the EU ETS. The report sets out the views of the committee on how the EU is leading by example, and the impact of unilateral action at EU and UK level. While I do not welcome all of the conclusions, two of them did stick out.

The first is the calling into question the impact that the carbon price floor will have on UK businesses and the second is the recommendation to develop international sector agreements.

We at EEF have long said that Carbon Price Floor is not needed to achieve a significant shift to low carbon electricity generation. The Carbon Price Floor presents the biggest risk to competitiveness of UK manufacturing from unilateral carbon policy and a continued low price within the EUA market is likely to significant increase this competitive disadvantage in coming years.

The Carbon Price Floor provides subsidy for new low carbon generation long before it is needed and is seen as purely a government revenue generation scheme that adds unilateral costs onto UK manufacturers. We have recommended that Government scrap it when it is fiscally possible and focus on decarbonising the energy sector, which can be better achieved through other policy measures such as well-designed Feed in Tariffs based on Contracts for Difference.

This said we do welcome the measures announced in the Autumn Statement on the Energy Intensive Industry Package for electro intensive businesses; however the Government must do more to support wider manufacturing.

The report goes on to call on the government to promote global action through International Sector Approaches, again echoing another recommendation of the Green and Growth report published in December.

Energy intensive sectors subject to significant international trade, such as steel, would be better served by individual sector approaches. This approach would be a stepping stone to a full global agreement on reducing carbon emissions and is increasingly recognised in international negotiations. However we feel the Government has an important role in supporting the development of these schemes.

Although I don’t support the calls to use the EED to “recalibrate” the EU ETS nor the call to the strengthening of the EU emissions reduction ambition to 30% in the absence of a truly international commitment to reducing emissions, I am encouraged that the Committee have recognised the impact that unilateral policies can have on manufacturing and the risks to investment in the UK.

When the Government launched its review of English waste policy it promised to help unlock the real economic value of wastes and assess what policies were really needed to achieve this.  Six months on from the government publishing the result of this exercise we ask whether Defra has succeeded in increasing the opportunity for sustainable waste management and resource efficiency – and if not, what needs to be done.

Surviving the current economic storm requires an innovative manufacturing sector. Indeed, since the end of the recession, growth in the manufacturing sector has been three times that of the rest of the economy. Securing sustainable supplies of materials, energy and water is therefore clearly extremely important to the health of the sector.

Our report, Defra’s Waste Policy Review - Six months was written following extensive site visits and interviews with manufacturers. We wanted to find out afresh what were the issues that are preventing manufacturers from becoming more resource efficient. These visits, interviews and subsequent focus groups helped to inform the findings in the report. We identify three challenges for government to respond to:

Firstly, manufacturers still hold a deep concern about accessing secure resources at the right quality. Indeed, in a recent survey of manufacturing executives, 80 per cent now regard a shortage of raw materials as a risk to their business. Of these, two thirds said it was their top risk. In addition, 1 in 6 companies said that a shortage of raw materials is now a brake on growth. We need a UK wide resource management strategy, analysing how materials can flow more easily in the economy, setting out what we need for the long-term. Other than some embryonic work to secure critical materials, the government has not seized the initiative here and could, and should, be much more ambitious.

Secondly, the legislative framework for waste is confusing, disjointed and can inadvertently act as a barrier to resource efficiency. We need a new cohesive policy framework centred on valuing waste as a resource, whilst ensuring the environment is protected.  This could revitalise the waste regulatory framework that has evolved piecemeal over the last 30 years.  The Government review focused on the regulation of the waste management sector and elevating recycling standards. Whilst we welcome better waste services and quality of recyclate, the review ignores the compliance headache for manufacturers. We believe there is a real opportunity for new better regulation approaches here. Regulators can stimulate resource efficiency by outlining what is permissible, rather than what is not. There is also an argument for retargeting some of the existing regulatory stock. In particular, where a materials market is functioning well, government should reduce packaging and producer responsibility regulation, and shift the focus to materials that need more market intervention.

Thirdly, manufacturers need excellent waste services and expert advice they can trust in order to make the most out of their wastes. Announcements such as the local authority commitment to open up services to businesses and the responsibility deal signed by the waste management sector are positive steps.  We hope this marks the start of an ongoing process to open up access to all local authority waste infrastructure and ensure businesses get a high-quality service from their waste contractors.

Resource efficiency can give our businesses and the UK a real competitive edge whilst securing essential environmental outcomes. It is time for government to match the ambitions of business.