Britain’s manufacturers expressed concern at the announcement of the UK’s proposed allocation of carbon emissions for phase 2 of the Emissions Trading Scheme (ETS), believing that it will leave Industry continuing to shoulder the burden and the UK significantly out of step with the rest of Europe.
Whilst welcoming the fact that the Electricity Supply Industry will bear most of the immediate burden through the auctioning of permits, EEF expressed concern that these costs will be passed on to businesses who are already paying amongst the highest energy prices in Europe. Firms covered by EU ETS therefore face the double whammy of complying with the scheme and paying higher energy prices. In response, EEF called on the government to take steps to ease Industry’s cost burden elsewhere
In addition, whilst re-iterating its support for the principle of the ETS, EEF reserved its greatest criticism for the government’s decision to push for reductions which were at the maximum end of the consultation range, leaving the UK with significantly tougher targets than the rest of Europe.
EEF Director General, Martin Temple, said:
“These proposals will leave the UK significantly out of step with the rest of Europe and damage our competitiveness at a time when we can ill afford to do so. Whilst we must tackle climate change, the way to success is through international co-operation not by the UK forging ahead in splendid isolation.
“Yet again Industry is having to shoulder most of the burden for reducing emissions when we urgently need other sectors of society to play their part. If this announcement is to result in yet higher electricity prices, manufacturers will be looking to government to offset this increase in energy costs elsewhere."
The preliminary results from the first year of trading showed that the UK was one of the few countries to have issued fewer allocations last year than its industry needed. Yet information coming in from other Member States is showing a continuing reluctance to cut back as severely as the UK in Phase 2.
ENDS
The Emissions Trading Scheme Phase 2 is due to run from 2008 to 2012. The final deadline for agreeing allocations is December 2006.
EEF, the manufacturers’ organisation is the representative voice of manufacturing in the UK with a federation of 11 regional Associations and ECIA, the Engineering Construction Industry Association. The EEF has a growing membership of almost 6,000 companies of all sizes, employing some 900,000 people from every sector of engineering, manufacturing, engineering construction and technology-based industries.